Bloomberg News

St James’s Place May Raise 2012 Dividend by a Third, CEO Says

February 22, 2012

Feb. 22 (Bloomberg) -- St. James’s Place Plc, the wealth manager majority-owned by Lloyds Banking Group Plc, raised its dividend by 33 percent as fee income climbed and said shareholders can expect a “similar” increase in the payout this year.

Net income climbed to 106.8 million pounds ($170 million) from 55 million pounds in 2010, the Cirencester, England-based company said today in a statement. That beat the 96.5 million- pound median estimate of 14 analysts surveyed by Bloomberg. The firm’s 2011 full-year dividend was raised to 8 pence a share from 6 pence.

“We’re starting to see cash emerge quite strongly,” Chief Executive Officer David Bellamy said in a telephone interview. “That’s facilitating the 33 percent increase in the full year dividend this year on top of the 33 percent increase in 2010. Shareholders can expect a similar increase in 2012.”

St. James’s Place, which advises clients with more than 30,000 pounds to invest, has benefited from wealthy customers seeking to shelter their savings in tax-free accounts as the British government raised levies on higher earners. Record low interest rates and delayed state provision for retirement are driving British savers toward investing in equity and bond funds, Bellamy said.

Tax Gain

Funds under management increased 6 percent to 28.5 billion pounds at Dec. 31 with new client money climbing 10 percent to 5.2 billion pounds, the company said. The wealth manager benefited from a tax gain of 88.4 million pounds in 2011. Fee and commission income climbed 15 percent to 525 million pounds.

“A strong performance from St. James’s Place this morning with almost all of the key metrics either ahead of consensus or in line,” Eamonn Flanagan, a Liverpool-based analyst at Shore Capital Group Ltd. said. The dividend increase “demonstrates the increasingly cash generative nature of the business model.”

The stock climbed 0.6 percent to 375.5 pence a share at 8:33 a.m. in London trading, valuing the firm at about 1.9 billion pounds.

Lloyds’s 60 percent stake in St. James’s Place has an “uncertain future” and is holding down the firm’s share price, according to Barrie Cornes, a London-based analyst at Panmure Gordon & Co. with a “buy” rating on the stock. A resolution may come this year, he wrote in a Feb. 20 note.

Lloyds “have said in the past that they’re not long term holders but they own the shares so the timing is entirely down to them,” Bellamy said. “There has been no change.”

--Editors: Jon Menon, Francis Harris

To contact the reporter on this story: Kevin Crowley in London at kcrowley1@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net;


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