More on St James Place
St James’s Place: H1 2006 results
Wealth management and insurance group, St James’s Place reported a whopping 55% increase in new business and a 52% increase in operating profits for the half year to June 2006.
Previously, the company reported excellent new business figures for Q1 (up 57%) which was helped by a much firmer market. As in the first quarter, growth has been driven by investment products and pensions.
The company notes that the social, economic and demographic conditions remain positive for its adviser based approach to wealth management. We might add that it remains largely favourable for much of the long term insurance industry as whole.
We looked at the key factors in more detail here.
Thus the industry as whole faces a much stronger market and St James’s well deserved reputation for prudence (it was unaffected by the problems that plagued a number of its peers) should ensure that it outperforms the market.
The company says the new pension rules introduced in April of this year together with the recent changes in the inheritance tax rules announced in the Budget, have made the need for advice more important than ever, thus expanding the potential market even further. This view is probably correct and will give the market a boost, at least in the short term.
Costs seem to be well under control, the company is optimistic of exceeding its own 15%-20% growth target for new business and overall prospects look good.
The share trades at 332p, on a prospective PE (2007 earnings) of 12.4x with a poor yield of 1.1%.
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