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Quilter declares special divi in first results after IPO

In its first results as a listed company Quilter has declared a special interim dividend of 12p per share, returning £221 million from the sale of Richard Buxton’s single strategy business, earlier this year.

Quilter declares special divi in first results after IPO

In its first results as a listed company Quilter has declared a special interim dividend of 12p per share, returning £221 million from the sale of Richard Buxton’s single strategy business, earlier this year.

The company’s £30.7 billion funds arm run by Buxton was sold to TA Associates for £583 million in June.

The company said that it used £300 of the proceeds to repay a senior unsecured term loan on 29 June and decided to pay a special interim dividend with the surplus.

It will not be paying a normal interim dividend but expects to declare a final dividend for 2018.

Quilter's share price was up 2.90% at 8.05am at 153.90p. Although it is up compared to its listing price of 145p on 25 June, it is slightly lower than its peak of 160p. 

Earlier this week JP Morgan put a neutral rating on the stock with a price target of 163p, while Goldman Sachs issued a buy recommendation with a target price of 180p. 

The announcement was accompanied by strong results from Quilter, which recorded an adjusted pre-tax profit of £110 million, up 16% compared to the first half of 2017. This was on a first half revenue of £385 million, which is up by 11%, driven by the increase in assets.

Despite the strong numbers, the company also revealed that since the listing there has been 12 resignations, which ‘may lead to higher than trend outflows in 12 to 18 months’ time’.  

Over the first half, the company said it saw net client cash flow of £3 billion, down from £3.4 billion year-on-year. While Quilter Investors saw strong inflows over the period, this was offset by weaker flows into Quilter International and Quilter Cheviot, down 75% and 17% respectively.  

Assets under management and administration are only slightly up to £116.5 billion, since 31 December, equating to a 2% rise.

Expenses over the period reaches £275 million, up 3% since December. This included an £11 million FSCS levy as well as investment in ‘new business initiatives’ of £14 million.

The firm added that it incurred £17 million in the first half related to the managed separation. It added that remaining costs are expected to be around £19 million.

Paul Feeney, chief executive said: ‘Despite all the work that has gone into the listing of Quilter plc, this is just the start of the next phase of Quilter's development. For this reason, we are delighted to announce a good set of results for our first reporting period as an independent listed company.

'After three years of essentially flat annual profits given the investment in the business, the return to growth with an increase in adjusted profit of 16% to £110 million is particularly pleasing.'

He said that the company is now looking to implement its new platform, expected early 2019, and ensure a smooth migration for clients. It will also continue to invest in growing its adviser and investment manager base through recruitment and acquisitions.

He added: ‘These are all on track and we remain confident in our strategic path and the growth prospects that we set out in our prospectus ahead of listing. We are very much where we expected to be at this stage on the Quilter journey.

'While short-term market fluctuations and Brexit induced uncertainty may exacerbate market volatility or temper momentum in near-term flows, we operate in a large and fragmented market that has plenty of growth potential. We are a young company with a 250 year heritage and we're just getting started.' 

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Richard Buxton
Richard Buxton Average Total Return:
22.08%
72/165 in Equity - UK (All Companies) (Performance over 3 years)
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