Reports

Net Inflows Sag At UK's Quilter

Tom Burroughes, Group Editor, 6 August 2019

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Client withdrawals from the Quilter Cheviot business helped dragged down inflows, the group reported yesterday.

UK financial group Quilter, which is shifting its focus more on wealth management as seen with a business disposal, yesterday reported that gross sales dropped to £6.0 billion ($7.3 billion) in the first six months of 2019 versus £7.9 billion a year earlier.

In net terms, cash flow – excluding Quilter Life Assurance, the business being sold off – sunk to £300 million in H1 from £3.0 billion a year earlier. There was a “modest outflow” of £200 million in the second quarter of this year, mainly caused by expected client pull-outs in Quilter Cheviot of about £800 million, it said in a statement yesterday. 

Adjusted pre-tax profits rose by 5 per cent to £115 million; it declared an interim dividend of 1.7 pence per share.

The firm has agreed to sell QLA, subject to regulatory approval, to ReAssure for £425 million, which represents 120 per cent of end-2018 own funds (after taking into account dividend payments of £130 million made to Quilter during the course of 2019). 

“The Board is currently minded to undertake a meaningful capital distribution from the net sale proceeds to shareholders with the method of capital return subject to shareholder consultation,” Quilter said.

Based on International Financial Reporting Standards, Quilter reported a loss attributable to shareholders from continuing operations of £40 million (H1 2018: £nil).

Assets under management/administration rose by 8 per cent from 31 December 2018 to £118.4 billion, it said.

“In addition to the Charles Derby Group acquisition announced in February 2019, I am delighted that we completed the acquisition of Lighthouse plc in June 2019, consolidating our place as the second largest retail advisory business in the UK. We are on a mission to make advice more valued and accessible, and want Quilter to be recognised as the best place to go for trusted financial advice in the UK,” Paul Feeney, chief executive, said. “We are building a business that is fit for the future. Good progress continues to be made on optimisation and with the UK Platform Transformation Programme, notwithstanding the additional costs announced today. While we have encountered some short-term delays, we are focussed on ensuring the programme is implemented to our desired quality and still expect to complete the programme by this time next year.”

Feeney added that the “uncertain political environment in the UK evidenced in the latter half of 2018 has continued into 2019”, but noted that gross new business sales have “held up well”.

“We experienced higher outflows in Quilter Cheviot following the resignation of some Investment Managers during 2018 putting pressure on net flows,” he added.

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