St James's first-half profits fall to £39.5m
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Your support makes all the difference.St James's Place Capital posted a steep drop in first-half profits yesterday as wealthy investors shied away from volatile equity investments, but the upmarket life assurer's shares rose on relief it did not do worse.
The company, which is majority owned by the HBOS banking group, said operating profits from core businesses excluding affiliates fell to £39.5m in the six months to 30 June, compared with a restated £56.9m in the same period last year.
Analysts' forecasts ranged from £32.1m to £40.0m, having been cut after a profit warning earlier in July.
"While it is understandable that some people have chosen to hold back on committing their money to new investments in the very unsettled conditions of the past six months, high quality advice on financial planning is at least as important in difficult times as in more normal circumstances," Sir Mark Weinberg, the chairman, said.
St James's shares, which have underperformed the UK's life assurance sector by 39 per cent over the past year, climbed 2p to 125p yesterday.
"There was some relief they came in at the top of the range. Plus they also maintained the dividend, which always helps," Chris Rathbone, an analyst at Williams de Broe, said.
St James's said new business slumped 18 per cent in its first half from the same period in 2001, but rose 11 per cent in the second quarter compared with the first.
Funds under management were also up 5 per cent from the start of the year at £6.6bn, reflecting the favourable investment performance of St James's funds as well as a low rate of withdrawals.
Profits from St James's life and pensions business fell by 25 per cent to £29.5m in its first half, while profits from its unit trusts business dropped by 34 per cent to £10m. The company maintained its interim dividend at 1.25p per share.
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