Hits: 18

28 July 2020

St James Place – H1 Results

Share Price 967p

Mkt Cap £5,189m

Conflict Disclosure: No Holding

  • Update AUM is up 13.8% since reporting the end of March figure. Net inflows accounted for 2% of this in the 3 month period. The pointlessness of accounting rules for insurers is underlined when IFRS PBT is up 288% to £221m but the company’s cash result is down 9% to £114m. Net income from FUM was up 9.5% to £219m while new business margin reduced from £61.8m to £58.2m as new business slowed. Establishment costs rose 8.5% while operational development costs increased significantly due to investment. One third of the final dividend continues to be retained and the 2020 dividend decision will be made in February 2021.
  • Estimates The consensus number of £259m for FY 20 is a conglomeration of different forecast bases.
  • Valuation As an insurer the NAV/share is 189p and the shares trade at 5.1X NAV. PE is c 18X on normalised IFRS results which today is skewed by life insurance tax. Yield is 4.5%.
  • Conclusion The company is at one of those investment phases when investment is required in systems etc while recruitment is being slowed and new business is slowed. This unstoppable marketing machine may take a breather for a year or two.

23 June 2020

St James Place – Trading Update

Share Price 940p

Mkt Cap £5,046m

Conflict Disclosure: No Holding

  • Update Net inflows 3.6% for the 5 months to 31 May. May continued the trend with 0.6% net inflows in the months. Markets have added 2.7% in the 5 months to May, all of which came during May
  • Estimates AUM are up 6.3% over the first 5 months of the year while forecasts are predicated on flat revenues over the course of 2020. 
  • Valuation PE 22X. Yield 4.7%.
  • Conclusion The shares were 1193 in February and are 22% lower while the AUM are up 6%. The marketing model is intact. Doubtless they will regain their highs.

27 May 2020

St James Place  – New Business Update

Share Price 877p

Mkt Cap £4,706m

Conflict Disclosure: No Holding


  • Update April saw net inflows of £0.81bn taking net inflows over the 4 months to April to £3.18bn so AUM is now up 13.8% from 1 January. April net inflows were in fact above the level of last April which given we have lockdown is encouraging for the industry 
  • Estimates  IFRS profit is expected to grow c 24% in 2020 folllowed by 10% in 2021. 
  • Valuation PER 21X Yield 5.1%. 
  • Conclusion It seems that investors have been putting money into the market disruption The shares are down 27% from their highs and now look better value than they have for some time. Woodford seems to have had little effect and this is looking like an opportunity.

30 April 2020

St James Place – Q1

Share Price 902p

Mkt Cap £4,838m

Conflict Disclosure: No Holding


  • Update The unstoppable marketing machine continues with net inflows of 2% in the quarter to March. One third of the final dividend is withheld, referring to regulatory sensitivity.


  • Valuation Mkt Cap/ AUM is c 4.8%. On Barcap numbers the shares trade at 30X 2020 estimates.


  • Conclusion The business is looking reliable and is reassuringly expensive

27 February 2020

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St James Place – FY Results 

Share Price 1084p

Mkt Cap £5,796m

Conflict Disclosure: No Holding

  • Results are described as “solid”.IFRS PBT down 12% to £187m. Net inflows were lower than the prior year at £9bn which is a respectable 9.4% of AUM. AUM is now £117bn. Cash result is down 12% also to £273m. Dividend is up 3% to 49.7p, which is a 97% pay-out ratio. Outlook refers to an encouraging start to the year and is confident.
  • Estimates I am seeing £264m PBT expectation so assume this a forecast on the basis of the cash result. 30% growth is expected in 2020.
  • Valuation PER 25X yield 4.5%
  • Culture The company scores highly on Glassdoor (4) while the customer reviews on Trustpilot are less flattering. A 46% gender pay gap is the highest in the space.
  • Conclusion The power of effective marketing in financial services is shown here.  Sometimes successful companies can become complacent.  Hargreaves Lansdown and St James’ Place are the two companies where this could be a concern. Notwithstanding that the financials and narrative suggest it the growth will continue.

30 January 2020

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St James Place– Q4 Update 

Share Price 1141p

Mkt Cap £6,104m

Conflict Disclosure: No Holding

  • Update 2.1% net inflows in the quarter brings AUM to £117bn. Over 12 moths the net inflows are 9.4% against the number of qualified advisers up 8%. AUM is up 22% over the year.
  • Estimates In December 2020 23% PBT growth is anticipated on the back of 17.5% revenue growth which looks reasonable in the light of 22% AUM growth
  • Valuation PER 21.1X Yield 4.5%
  • Culture While the press tells us the company is toxic the staff reviews are largely positive on Glassdoor. The incentivisation of the self-employed staff is strikingly different from say Brewin Dolphin who reported net inflows of 1% annualised yesterday.  
  • Conclusion The unstoppable marketing machine continues apace. While their charges seem high the model looks likely to continue to deliver.

16 December 2019

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St James Place 

Share Price 1148p

Mkt Cap £6.1bn

Conflict Disclosure: No Holding

  • Research – If there was an award for the most non independent piece of research I suspect the Numis report justifying St James Place fees would be nominated.  I would appreciate a copy if anyone can lay their hands on one. This is the St James Place quarterly newletter to clients.

This Yodelar review is not paid for by St James Place. TER of 7% is unusual.

  • Valuation PER 26.7X Yield 4.2%
  • Conclusion Mifid 2 may well have contributed to the devaluation of broker research

22 October 2019

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St James Place– Q3 Update 

Share Price 1013p

Mkt cap £5,407m

Conflict Disclosure: No Holding

  • Update Net inflows were 1.9% over the quarter which brings AUM to £112.8bn. Pensions are the driver of net inflows.  NAV on an EEV basis is £12.60 per share at 30 September.
  • Estimates AUM is now up 18% over the 9 months to September and forecasts anticipate £267m of pre tax profit.
  • Valuation EEV has been discredited for many insurers. The shares trade at a premium of 530% to NAV. In PE terms that is 24X and the yield is 4.8%.
  • Conclusion  The Yodelar report was scathing over St James’ performance. Not to mention the Woodford publicity. Then we have the high and complex charges.  It is hard to see what will stop the net inflows if this doesn’t when the industry is under pressure on flows. It does show the power of marketing in financial services. It still has momentum.  But I think of it as unethical.

31 July 2019

St James Place – H1 Results 

Share Price 1043p

Mkt Cap £5,538m

Conflict Disclosure: No Holding

  • Results. Net inflows of 4.6% drove AUM up 13% over the year. IFRS PBT was down 30% to £57.5m following a hit from the FCS compensation charge as well as investment in the academy, lower gross inflows providing less upfrom fee and investment in Asia and infrastrtucture.
  • Estimates £290.1m PBT is sought for the FY to December. Look steep.
  • Valuation PER 24.5X Yield 4.8%
  • Conclusion Really very overvalued for an overcharging marketing machine. The profit fall may be partly because post Woodford investors are wondering why they pay so much.

30 April 2019

St James Place – Trading Update 

Share Price 1135

Mkt cap £6.02bn

Disclosure: No holding

  • Update Net inflows 2.2% bringing total AUM up 8.3% over the quarter to £103bn. The company is confident
  • Valuation PER 24 yield 4.9%. Mkt Cap/AUM 5.8%
  • Conclusion Only a scaled and high charging wealth manager can achieve a valuation of 5.8% of AUM. The unstoppable marketing machine continues

24 January 2019

St James Place – Trading Update 

Share Price 941p

Mkt Cap £4.98bn

  • Update Net inflows were 2.6% over the 3 months to December 2018 while AUM were down 5% to £95.5bn. Over 12 months the number of partner businesses was up 3.1% to 2,489 and the number of qualified advisers was up 8% to 3,954.
  • Estimates Unlikely to change
  • Valuation PER 20.8 yield 5.6%. Market Cap/AUM is 5.2%
  • Conclusion This unstoppable marketing machine is highly valued and continues to produce returns for shareholders.  Hard to see what stops it other than Gina Miller.

23 October 2018

St James Place – Q3 Update  

Share Price 1035p

Mkt Cap £5.5bn

·         Update Net inflows continue to grow at 8.3% over the first 9 months of the year. AUM is now £100.6bn. Q3 flows amounted to 2.6% with the strongest flows in pensions.

·         Estimates Forecasts are predicated on £104bn AUM at 31 Dec 18 which looks about right.

·         Valuation PER is 23.8X and yield 4.8%. Mkt Cap/AUM is an eye watering 5.5%

·         Conclusion This model appears unstoppable until the customers start to care that so much of their AUM is finding its way into STJ’s revenue line. The share price says that’s not going to happen for a long time. Sadly that may well be the truth.