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St. James's Place assets top £100bn after solid start to year

After a solid start to the year for the wealth manager, broker Peel Hunt also upgraded the shares to 'buy'
Funds under management at St James's Place closed the quarter above £103bn

St. James's Place PLC (LON:SJP) reported positive fund inflows in the first quarter of 2019 to lift its assets under management to a record level.

Gross inflows of £3.61bn in the first three months of the year led to net inflows of £2.18bn, which were both lower than the £3.91bn and £2.6bn respectively seen a year ago but in line with market expectations.

READ: St James's Place net inflows slow in 'challenging' 2018

The wealth manager's funds under management closed the quarter at £103.52bn, up from the £95.6bn at the end of December and £89.91bn at the end of March last year, but modestly short of the consensus forecast of £103.7bn. The funds under management retention rate remained high at 95.9%, only slightly down on 96.2% seen in early 2018.

Chief executive Andrew Croft said the positive inflows, continued strong retention rates and record FUM “demonstrates the resilience of our business through the current political and macro-economic uncertainty”.

He added: “Whilst uncertainty will inevitably impact investor sentiment from time to time, it does not change the long-term needs of individuals.  There remains both a growing market for trusted face-to-face advice in the UK and an advice gap that represents a major opportunity for us.”

Faltering just short of a seven month-high, St. James's shares were down a penny at 1,133.5p by mid-morning on Tuesday despite an upgrade from broker Peel Hunt.

Analyst Stuart Duncan said the numbers were "broadly as expected" a "decent" start to the year despite the generally weaker market sentiment, with organic growth rate of net inflows on annualised basis equating to 9.1% of opening funds under management.

With the current share price a discount to reported EEV net asset value of 1,190p and trading on a December 2019 price/earnings multiple of 18.9 times, as well as offering a dividend yield of around 4.5%, Peel Hunt upgraded its recommendation to 'buy' from 'add'.

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