St. James's Place Share Discussion Threads

[dexdringle] 10/4/2024 22:49:42

The uncertainty has already knocked two thirds off the share price. Or three quarters if you take the high point two years ago.

Uncertainty means no one knows. It doesn't mean dead and buried.

It would be nice to see the board buying very significant numbers of shares though. Rather than relying only on their nice cushy new share options.

[the millipede] 10/4/2024 22:48:08

fenners,

Most people have what Warren Buffet calls a circle of competence. Clever people realise this and get expertise in when they lack it themselves.

HTH TM

[jakleeds] 10/4/2024 22:26:37

It’s not looking good here. Far too much uncertainty. And the one thing the market hates, is uncertainty.

Still no share buybacks and the new CEO still hasn’t bought any shares.

Even Andy Hornby bought shares at £2.50 in HBOS, after they’d fallen from about 11quid. And they nearly went bust and had to be rescued by Lloyds and the government.

Similar will happen here I suspect. I have no agenda , just looking at the wider picture, and the reality of the situation.

[jakleeds] 10/4/2024 22:22:03

Merchants trust sells SJP citing potential client confusion over fee overhaul

Investment trust Merchants sells SJP as managers warn of ‘operational difficulties, customer and partner confusion and further regulatory intervention’.

The strong post-pandemic performance of a £792.1m investment trust stalled last year after it suffered a double blow from the intervention of the FCA against two of its holdings.

Fund managers Simon Gergel, Richard Knight and Andrew Koch took the ‘difficult decision’ to sell St James’s Place (SJP) from investment trust Merchants (MRCH) after the FCA forced the national advice firm to overhaul its charges.

The company, which Merchants had held since 2018, subsequently set aside £426m to refund clients who had paid for but not received ongoing advice – a move that required SJP to halve its dividend.

The managers ditched the stock before then but, with the shares going on to halve in the 12 months to 31 January, Merchants reported SJP’s woes had knocked 1.1% of its annual return.

Writing in the annual report, they said the new business model would be good for consumers and ultimately might shore up SJP’s market position, but in the short to medium term would create big risks and uncertainties.


‘There is a lengthy delay until the changes take effect, and in the meantime there are risks of operational difficulties, customer and partner confusion, and further regulatory intervention,’ they said.

‘Investors must also become comfortable with a very material step down in cash generation when the new model begins, before growing relatively strongly in the following years. This unusual profile of cash generation creates additional uncertainty.’

Wealth manager Close Brothers also weighed on the portfolio, knocking 0.7% off Merchants’ annual return after the FCA launched a review of historic commissions paid by the company for selling car finance that could have ‘a material impact on the company’.

‘Other issues, such as the impact of lower asset prices in its wealth management business, are more normal, cyclical concerns. But the combination of events this year had a major impact on the shares,’ said the management trio.

In what chair Colin Clark called a ‘disappointing’ setback after good returns in the previous two years, the £789m trust dropped 2.5%, trailing a modest 1.9% increase in the FTSE All-Share. That was despite some positive performances from other holdings, including high street fashion chain Next, builders Redrow and Bellway and distribution company DCC.


Merchants’ record remains strong, with the latest data at 8 April showing net asset value (NAV) growth of 25.3% and 46.6% over three and five years, respectively, ahead of the All-Share’s 21.8% and 27.2%.

A recent weakening in the shares has seen them slip to a 3.6% discount to NAV, reducing shareholder returns to 19.1% and 39.4% over three and five years.

Despite the stock setbacks, income from the portfolio was strong, with revenue earnings per share rising 6.3% to a record 30.5p.

This enabled the board to declare a final dividend of 7.1p, giving a total payout for the year of 28.4p, up 2.9% on the 27.6p paid in the previous year. The 5%-yielding ‘dividend hero’ of the Association of Investment Companies has now paid a consistently rising dividend for 42 years.

[fenners66] 10/4/2024 21:07:47

The Millipede - SJP clients are supposed to be people with wealth....

On average how do you think they got it ?

Quite possibly by being smart , working good jobs , smartly putting savings away and investing for the future....

Why would you then jump to the conclusion that the same demographic who managed there wealth suddenly become so stupid as too invest all in cash or draw too much down and leave themselves "penniless" (of course that could also be a smart strategy to enjoy their cash and avoid having to pay nursing care / IHT...?

[dexdringle] 08/4/2024 20:50:09

Goes ex div on 25th April for the final dividend of 8p. It should have been around 40p.

The board don't seem to be doing much positive stuff just now. Or, if they are, they're keeping it to themselves.

[action] 08/4/2024 17:16:26

Divi due soon. Also relegation is also due.

[dexdringle] 08/4/2024 15:13:24

Nahhh. The new CEO is gutless too. He's only canned the bonus for the old CEO because he's gone already and he doesn't have to look him in the face.

[fenners66] 08/4/2024 13:42:55

Finally a board that wants to - at least for the CEO - take some responsibility . What about the rest of the board are they taking a hit as well?

[dexdringle] 08/4/2024 11:36:06

The Tines today: "The board of St James’s Place has axed the £456,700 annual bonus that had been due to its former boss for last year after he presided over a tumultuous final few months in charge of Britain’s biggest wealth manager".

I should bloody well hope so !

[maxk] 07/4/2024 19:01:47

Article in the torygraph.

[the millipede] 02/4/2024 13:37:56

I think POLR is probably a decent investment idea, to be honest.

Asset managers are beaten down, see also Premier Miton and Liontrust, but unlike those two POLR funds seem less UK weighted.

Of course many commentators think the time for UK shares to shine is coming. I am far from convinced, so would pick POLR out of those three.

But I think SJP is better.

1/ It is misunderstood. Many people don’t even grasp it is essentially an asset manager. They focus on the financial advice side which is not quite right, even though SJP makes money from advisers.

2/ It had capital inflows last year when most others saw outflows, which suggests resilience.

3/ It has an FCA investigation that again I think investors have misunderstood and will be value enhancing in the long term.

4/ All this equals a far more beaten down share price with greater change of outsize gains in the future, as more people cotton on to an improving reality over the next few years.

IMO BWDIK

[dexdringle] 28/3/2024 11:45:29

davethehorse, do you own shares in POLR by any chance ? 🙄

[the millipede] 28/3/2024 11:15:50

Not very interested in 20%. Thanks. So far in 2024 my 3 best performers have tripled, doubled and risen by 80%.

[davethehorse] 28/3/2024 09:55:32

POLR currently in the early stages of a huge breakout to the upside, lots of scope to rise 20% this year....;-) 10% yielder too.....

[dexdringle] 28/3/2024 09:08:44

I agree with you Millipede but jakleeds seems to have some sort of agenda. He won't tell us his invested position here though. I'm kind of hoping he has a massive short bet open but I doubt it.

[the millipede] 28/3/2024 08:18:53

“There is worse to come here in terms of news I suspect.“

This isn’t a bank with a complex balance sheet.

There aren’t any liabilities, except those the FCA invent after the fact.

The provision for complaints is massive and may not all be needed.

Capital inflows last year when every other asset manager saw outflows suggests the business is growing well. This is not being recognised in the share price.

Surprise more likely to the upside IMO.

[dexdringle] 27/3/2024 09:44:27

Anyone who has worked there for more than 12 months, and is therefore partly responsible for the current situation, should be prohibited from taking part in new share incentives at an exercise price of less than £10 a share.

[jakleeds] 27/3/2024 09:26:16

Normal service resumed here.
New CEO gets share options but hasn’t put his own hand in his pocket.
No sign of any share buy backs either.
There is worse to come here in terms of news I suspect.
My previous forecast of £3 by Xmas is probably a bit on the high side.

[jackdaw4243] 25/3/2024 16:55:25

Bottom pickers paradise, added a few on top of last week.

[dexdringle] 25/3/2024 15:06:48

If you do, I think you'll see £5 pretty quickly. And then £6 if you then hold for three months.

[the millipede] 25/3/2024 14:17:06

Maybe. I am a buyer at £4.60.