Quilter (QLT) H2 2020 earnings summary

Executive summary

• Consensus-beating performance in a challenging year; gross flows stable, net flows improved materially, and retention strengthened.

• Adjusted profit before tax was £168m, down 8% YoY; adjusted diluted EPS was 8.5p, down 1%.

• Strategic priorities advanced: UK platform transformation completed, advice acquisitions largely integrated, and International strategic review underway.

Financial highlights

• Revenue was £712m vs £682m in 2019; expenses fell 3% to £514m from £530m.

• IFRS profit after tax was £89m, compared with a £21m loss in 2019.

• NCCF reached £1.6bn vs £0.3bn in 2019; integrated net flows were £2.3bn vs £2.6bn.

• AUMA increased 7% to £117.8bn from £110.4bn.

Outlook and guidance

• 2021 cost base targeted at ~£560m, subject to broadly stable markets; forecast includes ~£15m additional savings and ~£16m costs to achieve.

• Optimisation initiatives expected to support a 2pp operating-margin improvement in 2021 vs 2020, adjusted for tactical savings.

• Expect reversal of ~£40m of 2020 tactical cost reductions; 2021 costs also reflect higher FSCS levy and normalized staff compensation and development investment.

• Medium-term NCCF target remains 5% of opening AuMA annually; aim to rebuild toward target after platform transformation and COVID-19 market volatility recedes.

• Dividend payout expected to remain at the upper end of the 40–60% range.