Quilter tumbles despite robust net client cash flows
Shares in Quilter lost over 7.6% of their value on Wednesday as the UK wealth manager that was once part of the Old Mutual stable reported a 20% rise in first-half adjusted profit before tax.
Quilter reported a rise in first-half adjusted profit before tax of a fifth, as net client cash flows more than doubled and assets under management and administration rose.
Adjusted profit before tax rose 20% to £85m in the six months to end-June, the London and JSE-listed financial services outfit said in a statement on Wednesday.
Net client cash flow surged 127% to £2.5bn (R51.2bn) year on year and represented 4% of opening assets under management and administration.
Net client cash flows refer to the difference between money received from customers — from premiums, deposits and investments — and money given back to them via claims, surrenders and maturities.
Despite these increases, the wealth manager’s share price fell to its lowest in about three weeks. The stock is up a mere 1.71% so far this year.
“I am pleased with our interim results, which demonstrate strong growth in flows across our business, with a material improvement from our new platform following our final migration of clients and advisers in February,” CEO Paul Feeney said.
“This improving momentum sets us up well to achieve our medium-term target of 6% net flows from 2022 onwards.”
Quilter has spent about £500m (R10.2bn) on a new technology platform that offers easier and more secure management of assets.
Total asset under management and administration, which represents the total market value of all financial assets managed and administered on behalf of clients, rose 7% to £126.6bn as at end-June.
The group, which was hived off from Old Mutual in 2018 in a four-way break-up of the former financial services conglomerate, is seeking to position itself as the go-to shepherd of the super-rich’s money in the UK.
Earlier in April, Quilter announced it had agreed to sell its international business for £483m as it seeks to simplify its business and focus on the UK.
The business accounted for about 18% of Quilter’s assets under management at the end of March, with the sale still subject to shareholder approval.
Quilter declared an interim dividend of 1.7p a share for the period, up compared with 1p a year ago.