Quilter targeting faster growth amid robust core performance

(Sharecast News) - Wealth manager Quilter announced a 2% increase in assets under management and administration (AuMA) on Tuesday, standing at £101.7bn at the end of June. The FTSE 250 company said the rise was mainly due to favourable market movements, contributing £1.9bn, and a robust performance in its core business.

It said it experienced gross inflows of £5.5bn in the first half of 2023, distributed evenly across both quarters.

Net inflows for the same period totalled £0.7bn.

Despite a 9% decline in the overall market, Quilter said second-quarter flows increased by 5% year-on-year.

There were net outflows of £0.5bn from non-core assets, up from £0.2bn in the first half of 2022, which the board said were related to assets still managed on behalf of businesses that Quilter had divested.

Adjusted profit before tax jumped 25% to £76m, while revenue also grew, by 3% to £312m, bolstered by revenue from corporate cash balances.

The company maintained stringent expense control, resulting in a drop in first-half costs for the third consecutive time.

As a result, its operating margin improved to 24%.

Quilter said it was on track to achieve its target of £45m in 'simplification' cost savings by the end of 2023 - one year ahead of schedule.

An additional saving of £50m was then expected by the end of 2025.

The firm also noted a stabilisation in its restricted adviser headcount, as it had added nine financial planners since December.

Adjusted diluted earnings per share surged 34% to 4.3p, bolstered by a capital return programme from the prior year.

However, the IFRS profit after tax stood at £5m - a drop from £151m in the first six months of 2022, due to market valuation changes in policyholder tax charges.

Quilter declared an interim dividend of 1.5p per share, making for a 25% increase from the 1.2p per-share distribution at the same time last year.

After the payment of that dividend, the company said its Solvency II ratio would be 240%, up from 230% at the end of December.

"We have delivered a strong improvement in first half profitability, pleasing flow outcomes in the Quilter channel and improved our market share of new advised platform flows," said chief executive officer Steven Levin.

"Our business model is fully aligned with the principles of the Consumer Duty regime and my focus is on doing more for our customers to improve business momentum in the near-term, and deliver faster growth and higher returns to shareholders in the longer-term.

"We are targeting an additional £50m of simplification savings by 2025 and we expect consensus profit estimates for this year to increase materially."

Reporting by Josh White for Sharecast.com.