powerpoint presentation/media/files/s/sjp...total new business by quarter ... life & unit trust...
TRANSCRIPT
Agenda
Introduction MIKE WILSON
Business Update DAVID BELLAMY
Financials ANDREW CROFT
Outlook DAVID BELLAMY
Q&A
Total new business by quarter
APE (Annual premiums plus 10% of single premiums)
69
9285
98
116
102113
94
10910310299
122
96
Q1 Q2 Q3 Q4
2006 2007 2008 2009
+54% +63% 2006 over 2005 +57% +59%
2007 over 2006 +41% +26% +20% +10%
+5% 2008 over 2007 +1% +0% -15%
-10% 2009 over 2008 -5%
Manufactured new business by quarter
APE (Annual premiums plus 10% of single premiums)
61
7873
9287 8798
84
101
86 86
101
83
98
Q1 Q2 Q3 Q4
2006 2007 2008 2009
+57% +75% 2006 over 2005 +65% +63%
2007 over 2006 +44% +29% +19% +7%
+0% 2008 over 2007 -3% -2% -13%
-3% 2009 over 2008 -1%
Investment new business by quarter
Single premiums
432476
445
512528
662
578 593
507
633
462 449431
558
Q1 Q2 Q3 Q4
2006 2007 2008 2009
+47% +50% 2006 over 2005 +71% +36%
2007 over 2006 +22% +39% +30% +16%
-4% 2008 over 2007 -4% -20% -24%
-12% 2009 over 2008 -15%
Pensions new business by quarter
Single premiums
113
161188
286
232248 239
277252
269282
267280 270
Q1 Q2 Q3 Q4
2006 2007 2008 2009
+78% +106% 2006 over 2005 +83% +147%
2007 over 2006 +106% +54% +27% -3%
+9% 2008 over 2007 +8% +18% -3%
+0% 2009 over 2008 +11%
Funds Under Management (£bn)
16.916.3
18.2
15.4
12.3
9.57.9
5.96.35.7
2000 2001 2002 2003 2004 2005 2006 2007 2008 HY
2009
16% p.a. compound growth over the last 5 years
and 18% p.a. over 10 years
+24% +10% -6%
+34% +20%
+29%
+25%
+18% -10% +3%
Partnership Number First Half Growth
49
40
30
22
-3
3.2%
2.6%
1.9%
-0.3%
3.7%
2005 2006 2007 2008 2009
No. % 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%
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
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%)
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
Analysis of Operating Profit
£’m 2009 2008
New business contribution 61.3 65.3
Profits from existing business
–expected 37.6 51.4
–experience variance 9.0 1.0
–operating assumption changes 1.6 -
Investment income 2.4 4.0
Life & unit trust operating profit 111.9 121.7
Other (10.9) (7.5)
Operating profit 101.0 114.2
Analysis of Pre-Tax Result
£’m 2009 2008
Operating profit 101.0 114.2
Investment variance (63.2) (175.7)
Economic assumption change (10.4) (0.5)
Pre-tax result 27.4 (62.0)
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
Analysis of Pre-Tax Result
£’m 2009 2008
Operating profit 101.0 114.2
Investment variance (63.2) (175.7)
Economic assumption change (10.4) (0.5)
Pre-tax result 27.4 (62.0)
Analysis of Pre-Tax Result
£’m 2009 2008
Operating profit 101.0 114.2
Investment variance (63.2) (175.7)
Economic assumption change (10.4) (0.5)
Pre-tax result 27.4 (62.0)
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
£’m 2009 2008
Loss/profit arising
on new business (5.5) (6.5)
Establishment expenses (35.3) (35.7)
Investment income 2.0 4.9
Miscellaneous 3.4 10.4
Underlying cash flow 0.6 12.2
Analysis of Adjusted Post Tax Cashflow
£’m 2009 2008
Net annual management fee 56.4 66.4
Unwind of surrender penalties (20.4) (27.3)
36.0 39.1 -8%
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)
IFRS Result
2008 2009
32.8m 20.0m Profit before shareholder tax
22.2m 16.0m Profit after shareholder tax
97.1p 107.8p Net asset value per share
Summary
• Manufactured proportion at 90%
• Establishment expenses 2% below last year
• Positive experience variance
• Robust operating profit
• Strong solvency position
Resilient Performance
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
49
40
30
22
-3
3.2%
2.6%
1.9%
-0.3%
3.7%
2005 2006 2007 2008 2009
No. % Growth
Highest first half growth in absolute and relative terms for many years
Partnership
• Strong recruitment momentum
• Infrastructure development
• Further segmentation
• Streamline business approach
• 19 years’ industry
experience
• John joined JOHCM in
October 2005 from Newton
Investment Management
John Wood Peg McGetrick
St. James’s Place UK & General Progressive Fund
• 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
Fund Manager Changes September 2009
St. James’s Place Greater European Progressive Fund
Stuart Mitchell
Kenneth A. Broekaert
• 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
• 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