St James’s still the place to attract rich clients

Profits jumped from £84.2m in 2010 to £109.7m in 2011, in what it said had been a “record year” for the group.

The company said it will hand back more of the cash generated from its strong sales in 2011 to shareholders, with a one third increase in the annual dividend and plans for a similar hike next year.

The company, majority owned by Lloyds Banking Group, said that a 10 per cent net inflow of funds under management during 2011 helped boost operating profit by 12 per cent to £371.5m.

The company said that despite the stock market volatility seen in the second half of last year, the growth in cash earnings was strong.

As a result the board has decided to increase the full year dividend by 33 per cent.

It said shareholders can expect a “similarly significant increase in the 2012 dividend”.

Shore Capital analyst Eamonn Flanagan said: “This demonstrates the increasingly cash generative nature of the business model.”

Wealth managers cater to affluent clients, who tend to have over £50,000 to invest.

St James’s Place said there are more than seven million people in Britain who fit into this affluent category.

The company is benefiting from an ageing UK population and rising demand for financial services as more people have to make their own pension provision.

St James’s Place said funds under management grew to £29.5bn at the end of January, up £1bn from the end of 2011.

Chief executive David Bellamy said: “While mindful of the difficult economic conditions that persist, we have a good platform for further growth in new business in 2012 and we remain confident of achieving our medium term growth objectives.

“Market conditions were far from helpful. Last year from about August onwards people were getting very nervous about investing in anything.”

Alongside its annual results, the company announced the appointment of former newspaper editor Patience Wheatcroft as an independent non-executive director.