Quilter shares rally as expects full-year profit beat

(Alliance News) - Quilter PLC reported an increase in assets under management and the wealth manager said it expects profit to top market expectations.

The London-based firm said IFRS pretax profit attributable to equity holders from continuing operations plunged to GBP7 million for the six months that ended June 30 from GBP182 million a year before. IFRS stands for International Financial Reporting Standards.

Continuing operations excludes results of discontinued operations relating to the sale of the Single Strategy business in 2018.

Quilter shares surged 11% to 79.25 pence on Tuesday morning in London. They jumped 10% to ZAR18.99 in Johannesburg.

As at June 30, assets under management and administration were GBP101.7 billion, up 2% from GBP99.6 billion at December 31, principally due to positive market movements of GBP1.9 billion.

This growth, it said, reflected effective cost management in an inflationary environment, as well as higher investment revenue resulting from interest income earned on cash and capital resources. But this offset a decline in net management fee revenue of 2%.

In the first half, net inflows dwindled to GBP200 million, down sharply from GBP1.4 billion.

Outflows of GBP4.8 billion were 14% higher than the prior period, reflecting increased withdrawals from clients that are already in drawdown to offset higher living costs and repay debt obligations given high interest rates.

Quilter declared an interim dividend 1.5 pence, up 25% from 1.2p.

Looking ahead, Quilter warned that normalisation of flows may take longer to achieve than it anticipated earlier in the year.

The second half of the year will see the full impact of the repricing of its Platform, which was announced at the end of June and the repricing of its Cirilium Active range at the end of the first quarter.

"We also anticipate a slightly higher second half cost out-turn due to planned spend on change initiatives. While this means second half profit is not expected to match that of the first half, our strong cost discipline and self-help plans means the adjusted profit out-turn for this year is expected to be meaningfully ahead of current market expectations, assuming broadly stable markets," Quilter said.

By Artwell Dlamini, Alliance News reporter

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