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Comprehensive overview of company performance in 2009 with financial analysis, business updates, and strategic outlook shared by key executives. Detailed breakdown of new business growth by quarter and key financial metrics provided.
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INTERIM RESULTS July 2009
Mike WilsonCHAIRMAN David BellamyCHIEF EXECUTIVE Andrew CroftFINANCE DIRECTOR
MIKE WILSON Chairman
Agenda Introduction MIKE WILSON Business Update DAVID BELLAMY Financials ANDREW CROFT Outlook DAVID BELLAMY Q&A
DAVID BELLAMY Chief Executive
2006 over 2005 +57% +54% +63% +59% 2007 over 2006 +41% +26% +20% +10% 2008 over 2007 +1% +5% +0% -15% 2009 over 2008 -5% -10% Total new business by quarter APE (Annual premiums plus 10% of single premiums)
2006 over 2005 +65% +57% +75% +63% 2007 over 2006 +44% +29% +19% +7% 2008 over 2007 -3% +0% -2% -13% 2009 over 2008 -1% -3% Manufactured new business by quarter APE (Annual premiums plus 10% of single premiums)
2006 over 2005 +71% +47% +50% +36% 2007 over 2006 +22% +39% +30% +16% 2008 over 2007 -4% -4% -20% -24% 2009 over 2008 -15% -12% Investment new business by quarter Single premiums
Pensions new business by quarter Single premiums 2006 over 2005 +83% +78% +106% +147% 2007 over 2006 +106% +54% +27% -3% 2008 over 2007 +8% +9% +18% -3% 2009 over 2008 +11% +0%
Total new investments of over £1.5bn Net inflows of £1bn +25%
Funds Under Management (£bn) 16% p.a. compound growth over the last 5 years and 18% p.a. over 10 years +18% +3% -10% +25% +29% +20% +34% +10% -6% +24%
Partnership Number First Half Growth Highest first half growth in absolute and relative terms for many years
Summary • Total APE of £203m (manufactured = 90%) • New inflows of +25% to £1bn • Partner numbers up 3.7%
ANDREW CROFT Finance Director
Margin • Lower total new business • Manufactured business 90% compared with 84% • Increased proportion of pension business • Total direct expenses down 5% and establishment costs down 2% • Margin as percentage of APE increased to 30.2% (2008: 29.6%)
Investment Variance • Continued falls in world stock markets in first six months • FTSE 100 4% • MSCI (£) 7% • S&P 500 (£) 10% • Actual return more than 6% below assumed rate of positive growth of 2% • The negative variance will reverse as and when markets recover
Net Asset Value per Share Net asset value 234.3p
Capital Position • Total group solvency assets at 30 June 2009 are £248.6 million (2008: £251.8 million) • Solvency remains strong • Investment policy for solvency assets continues to be prudent • Solvency II
Miscellaneous • Reduction in ability to fully group relieve taxable losses (c. £4.0 million) • Increase in actuarial reserves from the stock market fall and economic basis changes (c. £3.0 million) • Lower income from third party product sales (c. £1.0 million)
Dividend Interim dividend Maintained at 1.84 pence
Profit before shareholder tax 20.0m 32.8m Profit after shareholder tax 16.0m 22.2m Net asset value per share 107.8p 97.1p IFRS Result 2009 2008
Summary • Manufactured proportion at 90% • Establishment expenses 2% below last year • Positive experience variance • Robust operating profit • Strong solvency position Resilient Performance
DAVID BELLAMY Chief Executive
Interim Results • Another resilient performance • Strong net inflows • Exceptional retention • Excellent recruitment • Robust operating profit
Retail Distribution Review • We support the sense of direction • Raising standards – working with the Partnership • Status Disclosure – another view • Removing Provider / Product bias– further consultation • Better placed than most
A change of government? • Further tax changes (CGT, Income, VAT, Inheritance) • Further opportunities • Very experienced leadership team
Partnership Number First Half Growth Highest first half growth in absolute and relative terms for many years
Partnership • Strong recruitment momentum • Infrastructure development • Further segmentation • Streamline business approach
Investment Management Approach • Attracted over £10bn in last 5 years • New Fund Managers
St. James’s Place UK & General Progressive Fund Fund Manager Changes September 2009 • 19 years’ industry experience • John joined JOHCM in October 2005 from Newton Investment Management John Wood Peg McGetrick • Co-Founder and Managing Partner of Liberty Square Asset Management • Prior to this Peg was a partner at Grantham, Mayo, Van Otterloo and Company where she headed the International Active Equity Division
St. James’s Place Greater European Progressive Fund • 19 years’ industry experience • John joined JOHCM in October 2005 from Newton Investment Management • Joined J O Hambro Investment Management in 1998 and was made a Director and appointed the role of Head of Specialist Equities • Stuart Mitchell founded S.W. Mitchell Capital (SWM) in April 2005 Stuart Mitchell Kenneth A. Broekaert • Vice President and Portfolio Manager of European equities at Burgundy Asset Management • Ken joined Burgundy in April 2003, having previously worked at The Boston Consulting Group
Investment Management Approach • Attracted over £10bn in last 5 years • New Fund Managers • Further evolution • Capital accumulation, preservation and decumulation • Broaden fund classes • Not exclusively long only equities • More structured portfolios • Regular and active reviews • Building on success of IMA
Looking Forward • Our target group is growing • They are more concerned than ever about ‘Tax’ • They are more concerned than ever about their wealth • The Adviser population is shrinking • 200,000(+) down to 50,000(ish) • “Trust” is in short supply