PowerPoint Presentation/media/Files/S/sjp...Total new business by quarter ... Life & unit trust operating profit 111.9 121.7 Other ... PowerPoint Presentation Author:

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

Total new business by quarter

APE (Annual premiums plus 10% of single premiums)

69

9285

98

116

102113

94

10910310299

122

96

Q1 Q2 Q3 Q4

2006 2007 2008 2009

+54% +63% 2006 over 2005 +57% +59%

2007 over 2006 +41% +26% +20% +10%

+5% 2008 over 2007 +1% +0% -15%

-10% 2009 over 2008 -5%

Manufactured new business by quarter

APE (Annual premiums plus 10% of single premiums)

61

7873

9287 8798

84

101

86 86

101

83

98

Q1 Q2 Q3 Q4

2006 2007 2008 2009

+57% +75% 2006 over 2005 +65% +63%

2007 over 2006 +44% +29% +19% +7%

+0% 2008 over 2007 -3% -2% -13%

-3% 2009 over 2008 -1%

Investment new business by quarter

Single premiums

432476

445

512528

662

578 593

507

633

462 449431

558

Q1 Q2 Q3 Q4

2006 2007 2008 2009

+47% +50% 2006 over 2005 +71% +36%

2007 over 2006 +22% +39% +30% +16%

-4% 2008 over 2007 -4% -20% -24%

-12% 2009 over 2008 -15%

Pensions new business by quarter

Single premiums

113

161188

286

232248 239

277252

269282

267280 270

Q1 Q2 Q3 Q4

2006 2007 2008 2009

+78% +106% 2006 over 2005 +83% +147%

2007 over 2006 +106% +54% +27% -3%

+9% 2008 over 2007 +8% +18% -3%

+0% 2009 over 2008 +11%

Total new investments of over £1.5bn

Net inflows of £1bn

+25%

Funds Under Management (£bn)

16.916.3

18.2

15.4

12.3

9.57.9

5.96.35.7

2000 2001 2002 2003 2004 2005 2006 2007 2008 HY

2009

16% p.a. compound growth over the last 5 years

and 18% p.a. over 10 years

+24% +10% -6%

+34% +20%

+29%

+25%

+18% -10% +3%

Number of Partners

1,389

1,157

1,251

1,340

2006 2007 2008 HY 2009

Partnership Number First Half Growth

49

40

30

22

-3

3.2%

2.6%

1.9%

-0.3%

3.7%

2005 2006 2007 2008 2009

No. % Growth

Highest first half growth in absolute and relative terms for many years

Summary

• Total APE of £203m (manufactured = 90%)

• New inflows of +25% to £1bn

• Partner numbers up 3.7%

ANDREW CROFT Finance Director

Analysis of Operating Profit

£’m 2009 2008

New business contribution 61.3 65.3

Profits from existing business

–expected 37.6 51.4

–experience variance 9.0 1.0

–operating assumption changes 1.6 -

Investment income 2.4 4.0

Life & unit trust operating profit 111.9 121.7

Other (10.9) (7.5)

Operating profit 101.0 114.2

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%)


£’m 2009 2008








Other (10.9) (7.5)



£’m 2009 2008








Other (10.9) (7.5)



£’m 2009 2008








Other (10.9) (7.5)



£’m 2009 2008








Other (10.9) (7.5)



£’m 2009 2008








Other (10.9) (7.5)


Analysis of Pre-Tax Result

£’m 2009 2008


Investment variance (63.2) (175.7)

Economic assumption change (10.4) (0.5)

Pre-tax result 27.4 (62.0)

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


£’m 2009 2008






£’m 2009 2008





Net Asset Value per Share

Net asset value

234.3p

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

£’m 2009 2008

Loss/profit arising

on new business (5.5) (6.5)

Establishment expenses (35.3) (35.7)


Miscellaneous 3.4 10.4

Underlying cash flow 0.6 12.2

Analysis of Adjusted Post Tax Cashflow

£’m 2009 2008

Net annual management fee 56.4 66.4

Unwind of surrender penalties (20.4) (27.3)

36.0 39.1 -8%

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)

Dividend

Interim dividend

Maintained at 1.84 pence

IFRS Result

2008 2009

32.8m 20.0m Profit before shareholder tax

22.2m 16.0m Profit after shareholder tax

97.1p 107.8p Net asset value per share

Summary

• Manufactured proportion at 90%

• Establishment expenses 2% below last year

• Positive experience variance

• Robust operating profit

• Strong solvency position

Resilient Performance

DAVID BELLAMY Chief Executive

Interim Results

• Another resilient performance

• Strong net inflows

• Exceptional retention

• Excellent recruitment

• Robust operating profit

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

• A change of government?

• Further tax changes (CGT, Income,

VAT, Inheritance)

• Further opportunities

• Very experienced leadership team

Partnership Number First Half Growth

49

40

30

22

-3

3.2%

2.6%

1.9%

-0.3%

3.7%

2005 2006 2007 2008 2009

No. % Growth

Highest first half growth in absolute and relative terms for many years

Partnership

• Strong recruitment momentum

• Infrastructure development

• Further segmentation

• Streamline business approach

Investment Management Approach

• Attracted over £10bn in last 5 years

• New Fund Managers

• 19 years’ industry

experience

• John joined JOHCM in

October 2005 from Newton

Investment Management

John Wood Peg McGetrick

St. James’s Place UK & General Progressive Fund

• 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

Fund Manager Changes September 2009

St. James’s Place Greater European Progressive Fund

Stuart Mitchell

Kenneth A. Broekaert

• 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

• 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

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

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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PowerPoint Presentation/media/Files/S/sjp...Total new business by quarter ... Life & unit trust operating profit 111.9 121.7 Other ... PowerPoint Presentation Author: