Quilter (QLT) H2 2021 earnings summary

Executive summary

• Strategic progress included completion of the Platform Transformation Programme, repositioning of Advice, sale of Quilter International for £481m and £61m of Optimisation savings.

• Continuing-operations adjusted profit before tax rose 28% to £138m; net inflows increased to £4.0bn, equal to 4% of opening AuMA.

• Priorities for 2022 include growing adviser numbers and Platform flows, launching refreshed investment solutions and targeting £45m of Simplification savings by 2024.

Financial highlights

• Continuing-operations revenue grew 10% to £618m; expenses rose 5% to £480m, and adjusted PBT increased 28% to £138m.

• IFRS profit after tax was £23m versus £13m in 2020; adjusted diluted EPS rose 42% to 7.4p.

• Average AuMA increased 17% to £105.3bn; revenue margin was 48 bps versus 49 bps in 2020.

• Gross flows reached £13.2bn, up 33%; net flows were £4.0bn, up 167% YoY.

Outlook and guidance

• Target net inflows of at least 6% of opening AuMA p.a. from 2022; expected Affluent growth is higher than the Group target.

• Target adjusted PBT to double by 2025 from the 2020 continuing-business base, assuming stable markets; average EPS growth target is mid-teens through 2025.

• Operating margin target: at least 25% in 2023 and 30%+ in 2025; 2022 margin expected broadly stable.

• Simplification targets ~£55m cost to achieve and £45m savings by 2024, alongside ~£35m of revenue and capability investment.

• 2022 EPS expected to benefit from business momentum and share consolidation; expenses remain under tight control amid inflation.