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INTERIM RESULTS July 2009

INTERIM RESULTS July 2009. Mike Wilson CHAIRMAN David Bellamy CHIEF EXECUTIVE Andrew Croft FINANCE DIRECTOR. MIKE WILSON Chairman. Agenda. Introduction MIKE WILSON Business Update DAVID BELLAMY Financials ANDREW CROFT Outlook DAVID BELLAMY Q&A. DAVID BELLAMY Chief Executive.

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INTERIM RESULTS July 2009

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  1. INTERIM RESULTS July 2009

  2. Mike WilsonCHAIRMAN David BellamyCHIEF EXECUTIVE Andrew CroftFINANCE DIRECTOR

  3. MIKE WILSON Chairman

  4. Agenda Introduction MIKE WILSON Business Update DAVID BELLAMY Financials ANDREW CROFT Outlook DAVID BELLAMY Q&A

  5. DAVID BELLAMY Chief Executive

  6. 2006 over 2005 +57% +54% +63% +59% 2007 over 2006 +41% +26% +20% +10% 2008 over 2007 +1% +5% +0% -15% 2009 over 2008 -5% -10% Total new business by quarter APE (Annual premiums plus 10% of single premiums)

  7. 2006 over 2005 +65% +57% +75% +63% 2007 over 2006 +44% +29% +19% +7% 2008 over 2007 -3% +0% -2% -13% 2009 over 2008 -1% -3% Manufactured new business by quarter APE (Annual premiums plus 10% of single premiums)

  8. 2006 over 2005 +71% +47% +50% +36% 2007 over 2006 +22% +39% +30% +16% 2008 over 2007 -4% -4% -20% -24% 2009 over 2008 -15% -12% Investment new business by quarter Single premiums

  9. Pensions new business by quarter Single premiums 2006 over 2005 +83% +78% +106% +147% 2007 over 2006 +106% +54% +27% -3% 2008 over 2007 +8% +9% +18% -3% 2009 over 2008 +11% +0%

  10. Total new investments of over £1.5bn Net inflows of £1bn +25%

  11. Funds Under Management (£bn) 16% p.a. compound growth over the last 5 years and 18% p.a. over 10 years +18% +3% -10% +25% +29% +20% +34% +10% -6% +24%

  12. Number of Partners

  13. Partnership Number First Half Growth Highest first half growth in absolute and relative terms for many years

  14. Summary • Total APE of £203m (manufactured = 90%) • New inflows of +25% to £1bn • Partner numbers up 3.7%

  15. ANDREW CROFT Finance Director

  16. Analysis of Operating Profit

  17. Margin • Lower total new business • Manufactured business 90% compared with 84% • Increased proportion of pension business • Total direct expenses down 5% and establishment costs down 2% • Margin as percentage of APE increased to 30.2% (2008: 29.6%)

  18. Analysis of Operating Profit

  19. Analysis of Operating Profit

  20. Analysis of Operating Profit

  21. Analysis of Operating Profit

  22. Analysis of Operating Profit

  23. Analysis of Pre-Tax Result

  24. Investment Variance • Continued falls in world stock markets in first six months • FTSE 100 4% • MSCI (£) 7% • S&P 500 (£) 10% • Actual return more than 6% below assumed rate of positive growth of 2% • The negative variance will reverse as and when markets recover

  25. Analysis of Pre-Tax Result

  26. Analysis of Pre-Tax Result

  27. Net Asset Value per Share Net asset value 234.3p

  28. Capital Position • Total group solvency assets at 30 June 2009 are £248.6 million (2008: £251.8 million) • Solvency remains strong • Investment policy for solvency assets continues to be prudent • Solvency II

  29. Analysis of Adjusted Post Tax Cashflow

  30. Miscellaneous • Reduction in ability to fully group relieve taxable losses (c. £4.0 million) • Increase in actuarial reserves from the stock market fall and economic basis changes (c. £3.0 million) • Lower income from third party product sales (c. £1.0 million)

  31. Dividend Interim dividend Maintained at 1.84 pence

  32. Profit before shareholder tax 20.0m 32.8m Profit after shareholder tax 16.0m 22.2m Net asset value per share 107.8p 97.1p IFRS Result 2009 2008

  33. Summary • Manufactured proportion at 90% • Establishment expenses 2% below last year • Positive experience variance • Robust operating profit • Strong solvency position Resilient Performance

  34. DAVID BELLAMY Chief Executive

  35. Interim Results • Another resilient performance • Strong net inflows • Exceptional retention • Excellent recruitment • Robust operating profit

  36. Retail Distribution Review • We support the sense of direction • Raising standards – working with the Partnership • Status Disclosure – another view • Removing Provider / Product bias– further consultation • Better placed than most

  37. A change of government? • Further tax changes (CGT, Income, VAT, Inheritance) • Further opportunities • Very experienced leadership team

  38. Partnership Number First Half Growth Highest first half growth in absolute and relative terms for many years

  39. Partnership • Strong recruitment momentum • Infrastructure development • Further segmentation • Streamline business approach

  40. Investment Management Approach • Attracted over £10bn in last 5 years • New Fund Managers

  41. St. James’s Place UK & General Progressive Fund Fund Manager Changes September 2009 • 19 years’ industry experience • John joined JOHCM in October 2005 from Newton Investment Management John Wood Peg McGetrick • Co-Founder and Managing Partner of Liberty Square Asset Management • Prior to this Peg was a partner at Grantham, Mayo, Van Otterloo and Company where she headed the International Active Equity Division

  42. St. James’s Place Greater European Progressive Fund • 19 years’ industry experience • John joined JOHCM in October 2005 from Newton Investment Management • Joined J O Hambro Investment Management in 1998 and was made a Director and appointed the role of Head of Specialist Equities • Stuart Mitchell founded S.W. Mitchell Capital (SWM) in April 2005 Stuart Mitchell Kenneth A. Broekaert • Vice President and Portfolio Manager of European equities at Burgundy Asset Management • Ken joined Burgundy in April 2003, having previously worked at The Boston Consulting Group

  43. Investment Management Approach • Attracted over £10bn in last 5 years • New Fund Managers • Further evolution • Capital accumulation, preservation and decumulation • Broaden fund classes • Not exclusively long only equities • More structured portfolios • Regular and active reviews • Building on success of IMA

  44. Looking Forward • Our target group is growing • They are more concerned than ever about ‘Tax’ • They are more concerned than ever about their wealth • The Adviser population is shrinking • 200,000(+) down to 50,000(ish) • “Trust” is in short supply

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