UK wealth manager St James's Place boosts payout ratio after profit beat

Feb 25 (Reuters) - St. James's Place raised its shareholder payout ratio to 70% of ⁠underlying cash profit on Wednesday, a year ahead ⁠of schedule, after Britain's largest wealth ​adviser reported annual earnings that beat analysts' forecasts, sending shares up 5.4%.

Engagement tied to the group's revised charging structure has accelerated business momentum in recent quarters. The ​change is ‌expected to bring in more fee-paying assets, giving the wealth manager a steadier flow of income and helping it lift its revenue.

The firm's underlying cash result rose more than 3% to 462.3 million pounds ($624.8 million), above a company-compiled analysts' ​consensus estimate of 445.5 million pounds.

St. James's Place plans to return 70% ‌of its underlying cash result to shareholders from 2026, up from 50% currently. Dividends are expected to account for ‌at least 40% of shareholder returns, with share buy-backs making up the balance.

WEATHER THE STORM

Shares of European money managers slumped heavily earlier this month on investor ​concerns that artificial intelligence will upend established businesses.

CEO Mark FitzPatrick brushed aside February's AI-driven market rout, ‌which dragged the company's shares down more than 12% at one point, saying the selloff amounted to "noises within the financial markets, nothing that was directly impacting our business."

On ⁠the ⁠volatility driven by tariffs, FitzPatrick said the company's diversification ‌into multiple markets and sectors meant its clients "will be well positioned to be able to weather the ​storm".

The company has ​implemented cost-cutting measures to boost profitability and FitzPatrick said ‌he was confident the company would hit its 100 million pound cost savings target by the beginning of 2027.

St James's Place