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St James's Place shares fall as net inflows slow in 'challenging' year for markets

Chief executive Andrew Croft said markets posted a strong first month in 2019 following a downturn in late 2018
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Shares dropped more than 3% in late morning trading

St James’s Place PLC (LON:STJ) reported a 14% rise in full-year pre-tax profit but net inflows eased as a slowdown in China’s economy, US-China trade tensions and Brexit uncertainty weighed on investor sentiment.

The wealth manager said pre-tax profit rose to £211.9mln in 2018 from £186.1mln a year ago.

READ: St James's Place sees funds under management drop by £5bn, but net inflows hit quarterly record

Net inflows increased 8% to £10.3bn, compared to a 40% jump in net flows the previous year.

The company said the year proved to be “challenging one” for investors.

“The market started weakly, recovered in the second quarter, held steady in the third, before seeing a sharp correction in the final quarter, resulting in investment returns for the year as a whole being negative across almost all asset classes,” chief executive Andrew Croft said.

“A number of factors lay behind the selloff: Brexit concerns, US-China trade tensions; slowing growth in China and potentially, in the US; the end of the Trump tax-cuts stimulus to corporate earnings; and, perhaps above all, worries over the tightening monetary policy with the US Federal Reserve raising interest rates four times during the course of the year.”

Funds under management rose 5% to £95.6bn and gross inflows edged up to £15.7bn from £14.6bn last year.

The group recommended a final dividend of 29.73p per share, bringing the total payout for the year to 48.22p, up 12.5% on 2017.

Croft said markets have seen a recovery at the start of 2019.

“After the downturn of late 2018, markets posted a strong first month in 2019, a recovery that has been reflected across all our Portfolios, reflecting a growing belief that initial global growth fears had been overdone. Irrespective of any future short-term volatility, we remain confident that our investment approach will continue to support clients in realising their long-term goals,” he said.

Shares dropped 3.3% to 944p in late morning trading.

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