St James's Place tumbles as slashes dividend, swings to loss

(Correcting that St James's Place is based in Cirencester.)

(Alliance News) - St James's Place PLC shares plummeted on Wednesday, after the release of its results confirmed its difficult year, prompting the wealth manager to more than halve its annual dividend.

Shares in the Cirencester, Gloucestershire-based company were down 27% to 453.90 pence in London on Wednesday at midday, by far the worst FTSE 100 performing stock. The wider index was down just 0.7%.

Over the last 12-months, St James's Place is down 65%, while the FTSE 100 index is down just 3.2%.

Total funds under management jumped 13% to GBP168.2 billion at the end of 2023 from GBP148.4 billion a year earlier.

St James's Place reported gross inflows of GBP15.4 billion in 2023, down 9.4% from GP17.0 billion a year earlier. New inflows dropped by 48% to GBP5.1 billion from GBP9.8 million.

The company swung to an annual attributable pretax loss of GBP4.5 million, compared to a GBP503.9 million profit in 2022.

Cash at the year-end came was GBP68.7 million, down from GBP410.1 million.

St James's Place recently has been under pressure from UK regulators over its fee structure, promising in October to remove penalties for early withdrawals by customers starting from the second half of 2025.

In January, it assured the market it is "reviewing all elements" of the business.

It said that results for 2023 have "been significantly impacted by an assessment into the evidencing and delivery of historic ongoing servicing and the provision we have established for potential client refunds."

However, Chief Executive Officer Mark FitzPatrick assured shareholders on Wednesday that it is now "confident this is a historic issue".

FitzPatrick added: "Overall, 2023 was a difficult year for SJP but we've faced into our challenges. We've raised our standards around both the delivery and evidencing of ongoing client servicing and we've announced changes across our business, including our charges structure, so that we're in good shape for the future.

"In the near-term, we expect the industry outlook to remain challenging given the pressures that clients continue to face. The near-term environment notwithstanding, the longer-term structural opportunity for the financial advice industry is hugely attractive. With scale advantage, a strong partnership of advisers, and an investment approach that delivers for clients, we are very well placed to capture this opportunity and deliver value for all our stakeholders."

On the back of the results, St James's Place declared a final dividend of 8.00 pence, cut from 37.19p. This lowered its full-year dividend to 23.83p from 52.78p.

Looking at its dividend going forward, St James's Place said the annual dividend will be 50% of underlying cash result. It plans to pay a fixed annual dividend of 18.0p in the years 2024 to 2026, with share buybacks making up the remainder returns.

Looking further ahead, St James's Place expects to be able to grow the cash dividend as proportion of total distributions.

By Sophie Rose, Alliance News senior reporter

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