St James's Place plc has received a round of applause from City analysts following the wealth manager’s less-terrible-than-expected interim results.
The controversy-stricken wealth manager, which has faced thousands of overcharging claims and a plummeting share price, saw fewer net outflows than predicted in the first half, while funds under management soared to a new record of £181.9 billion.
There was “an awful lot” to digest in the first proper statement since Mark FitzPatrick came in as chief executive, said Panmure Liberum.
Second-quarter net flows were “well ahead of estimates”, as was the underlying cash result, while cost-cutting plans, cash profit targets, the 6p dividend and a maiden buyback of £33 million were the cherries on top.
“There are still plenty of challenges in addressing past issues which are not resolved today, but this is a ‘glass more than half full’ statement,” Panmure said, adding: “Although redemptions continue to be elevated, net flows were comfortably ahead of expectations in the quarter. This suggests that clients are not as agitated by the issues flagged by many commentators.”
Panmure sees the stock as a buy with a 1,400p price target.
Peel Hunt analysts are considerably more conservative with a 750p price target (still a buy nonethless), though the broker was also optimistic that “flows were better than expected”.
“The strategic focus is on delivering strong basics as a business, improving the client proposition, offering strong adviser support, and building a performance business,” Peel Hunt said of management’s game plan.
St James’s interims preceded a gigantic repricing of its battered share price, with the stock soaring 24% to a year-to-date high of 692p.