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Wealth Management

St. James’s Place 2020 set to be another year of major net inflows

St. James’s Place plc (LON:STJ), the wealth management group, has issued its new business and financial results for the six months ended 30 June 2020.

New investment and funds under management

· Gross inflow of funds of £7.3 billion (2019: £7.4 billion)

· Continued strong retention of client funds – 96%

· Net inflow of funds of £4.5 billion (2019: £4.4 billion)

· Group funds under management of £115.7 billion (31 December 2019: £117.0 billion)

Financial highlights

· EEV new business profit £365.3 million (2019: £386.3 million)

· EEV operating profit £418.7 million (2019: £465.7 million)

· IFRS profit before shareholder tax £221.9 million (2019: £57.3 million)

· IFRS profit after tax £178.1 million (2019: £45.8 million)

· Underlying cash result £114.4 million (2019: £125.1 million)

· Underlying cash basic earnings per share of 21.4 pence (2019: 23.7 pence)

Other highlights

· We are now represented by 4,324 qualified advisers across the Partnership

· Achieved a rapid and successful transition to remote working practises in response to the COVID-19 crisis

· Accelerated the pace of technology investment to facilitate digital processes across the Group and Partnership

Andrew Croft, Chief Executive, commented:

“The first half of 2020 has been an extraordinary period, both here in the UK and across the world, as the COVID-19 pandemic has profoundly impacted all our lives.

We began the year with renewed confidence and momentum in the business as we saw investor sentiment rise following the UK General Election in December 2019, but this gave way to a challenging external environment in the UK as COVID-19 related lockdown and associated social distancing measures impacted the way we and the Partnership conduct business. I am, though, pleased to report a robust set of results for the first six months of 2020, which is testament to the resilience of our business. This extends beyond the resilience of our business model to include our people, the Partnership, our systems and technology, and our finances, leaving us well positioned to make the most of the opportunities and challenges ahead.

Our gross inflows for the half totalled £7.3 billion, which was 2% lower than the first half of 2019. Importantly, retention of existing client investments has been particularly strong, providing for net inflows of £4.5 billion. This is equivalent to 8% of opening funds under management on an annualised basis. These net inflows, together with the impact from investment markets, results in closing funds under management of £115.7 billion.

As the population at large recovers from more than four months of lockdown we anticipate a period of recuperation for the UK. Nonetheless, from what we have experienced so far in July, we still expect new business flows for the third quarter to be similar or slightly lower in terms of value to the level of flows recorded for the second quarter.

We are then hopeful that, as the country returns from the summer break refreshed and ready for a return to the office, and supported by the high levels of client service provided by the Partnership since lockdown, we will see momentum build through the final quarter.

Overall then, 2020 is set to be another year of major net inflows as our business model proves resilient in a really difficult period. We are more confident than ever that we will deliver growth over the longer term given the strengths of St. James’s Place and the dynamics of our market.”

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