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Interim Results July 2012: Business Update and Financials

This report provides an overview of the interim results for July 2012, including updates on business performance, financials, and outlook. Highlights include APE growth, new single investments, net inflows, and funds under management. The report also discusses partner numbers, dividends, and the company's capital position.

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Interim Results July 2012: Business Update and Financials

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  1. INTERIM RESULTS July 2012

  2. Agenda Business UpdateDAVID BELLAMY FinancialsANDREW CROFT Outlook DAVID BELLAMY Q&A

  3. APE (Annual premiums plus 10% of single premiums) Total new business by quarter

  4. Single investment by quarter

  5. APE (Annual premiums plus 10% of single premiums) Pensions new business by quarter

  6. Strong retention of funds • Retention 95% • Net inflows + £1.51 bn

  7. Funds under management £30.9bn +8% +6% +26% +31% +18% -10% +25% +29% +20% +34% -6% June

  8. Growth in number of Partner numbers +3.2% +6% +6% +9% +7% +8%

  9. Partner Qualification • 91% Partners qualified • 6% require one or two exams

  10. Highlights • APE growth +5% (Q2 +13%) • New Single Investments - £2.76 bn • Net inflows - £1.51 bn • FUM up £2.4 bn to £30.9 bn • Partner numbers up to 1,702 • Dividend increase +33%

  11. ANDREW CROFT Chief Financial Officer

  12. Introduction • Challenging market during first six months of the year • Strong operating performance in all financial measures • Of particular note is the continuing growth in the cash emergence of the business • Resulting in a 33% increase in the interim dividend • Capital and solvency position remains strong

  13. Analysis of EEV operating profit

  14. New business margin

  15. Non – manufactured business • Manufactured proportion 85% compared with 93% in 2011 • In 2nd quarter one large £21 million APE group pension case • Excluding this case manufactured proportion would be 90% • This is a one-off nice to have but distorts the total margin • This is most definitely not a trend or anything to be concerned about

  16. Analysis of EEV operating profit

  17. Analysis of EEV pre-tax result

  18. Analysis of funds under management

  19. Analysis of EEV pre-tax result

  20. EEV net asset value per share

  21. IFRS profit before shareholder tax

  22. Pre- tax IFRS profit

  23. Analysis of shareholder tax charge

  24. IFRS net asset value per share

  25. Analysis of post tax cash result

  26. Analysis of EEV pre-tax result

  27. Analysis of post tax cash result

  28. Return on the investment in new business

  29. Analysis of post tax cash result

  30. Post-tax cash result 34% Double Half Year* Investment in new business * For illustration purposes

  31. Growth in cash result

  32. Unbroken dividend growth +33% +33% +2.5% +2% +18% +33% +16% Interim * Plus special dividend of 6.35 pence

  33. Expenses • Establishment expense growth for the half year was 4.2% • We will maintain pressure on these costs but will continue to invest in the business where appropriate (eg Partner recruitment) • Development costs were £4.0 million in the first six months and we anticipate a similar spend in the second half of the year • Our full year contribution to the FSCS levy to be some £6-7 million (double last year)

  34. Capital position • Total group solvency assets at 30 June 2012 were £368.2 million • Solvency remains strong • Holding a £35.0 million dividend reserve • Investment policy for solvency assets continues to be prudent • Solvency II

  35. DAVID BELLAMY Chief Executive

  36. ‘Trust’ in financial services at an all time low • Scandal surrounding LIBOR fixing • Product failures • Key Data; Arch Cru; MF Global etc. • Regulatory sanctions • Increasing FSCS levies • Corporate culture & trust – never more important

  37. Business momentum Driven by:- • Dedicated team • Focused on delivering good outcomes for clients • Partner development • Quality of new recruits • New funds & fund managers

  38. Predictability

  39. USP’s • The Partnership • Our Investment approach • Our Culture ‘Relationship based business’

  40. 2012 Awards

  41. Annual Company meeting

  42. Foundation Fund Raising Target

  43. Growth in Partner numbers +3.2% +6% +6% +9% +7% +8%

  44. Advice marketplace

  45. Adviser Community • Over 400 Advisers

  46. New Advisers

  47. Adviser Community • Over 400 Advisers • Average experience 10yrs • Average age 44 • 156 Partners formerly advisers • 30 ‘second generation’

  48. Academy • Two intakes • Average earnings c£100,000 • Average age 39 • Second generation later this year

  49. Professional Qualifications • 91% qualified • 6% - 2 exams or less • Over 2,000 qualified individuals • 100 Chartered Planners – many more to come

  50. SRA

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