Saturday, 4th July 2009

 

26 February 2008 - Mike Foster, Financial News

St James's Place success clouded by dual accounting approach

The UK wealth manager reported a surge in new business last year but questions remain over its profitability when measured by different accounting standards.

St James's Place, the UK wealth manager 60% owned by banking group HBOS, reported new business rose 23% and funds under management rose 18% to £18.2bn. (€24.1bn) in the year to December. The company continues to target business growth of 15% to 20% a year.

But the picture is clouded by St James's use of two different accounting policies, which suggest a more mixed picture for its profitability.

Under its preferred European Embedded Value policy, operating profits rose 39% to £244.7m.

Using the more generally recognised International Financial Reporting Standards, operating profits fell 10.6% to £96.1m following a series of one-off costs. Ignoring the one-offs, operating profits on this basis would have been down 2% to £76.4m.

The number of partners within St James's ranks of advisers rose 8% to 1,251 at the year end, representing St James's fastest growth since 1999.

Chairman Mike Wilson will be 65 in December, but he has agreed to remain in position, progressively on a three day a week basis, until he is 68.

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Relocation, relocation, relocation

Banks have never been shy of firing staff at the merest whiff of a downturn. First the fat, then the muscle and finally the bone. In the past, cuts have been so deep that firms have found it hard to benefit when the markets rebounded, paying over the odds to restaff at speed. Such wild oscillations in staffing numbers are known as “doing a Merrill”.

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