St James’s Place has slashed its final dividend by a third as it admits it is not immune to the fallout from the Covid crisis which has dragged its assets down 13% in the first three months of the year.
The FTSE 100 wealth manager said it would withhold 11.22p per share worth of shareholder payouts, about one third of its proposed final dividend, until the “financial and economic impacts of Covid-19 become clearer”.
Shareholders will now receive a second 2019 interim dividend of 20.0p per share on 27 May. The board will make a single dividend decision relating to the 2020 financial year when SJP’s next set of full-year results are released in February 2021.
SJP was one of 10 UK plcs that slashed £2.4bn worth of dividends on Thursday, according to data from AJ Bell. Sainsbury’s and Shell also announced dividend cuts with the latter slicing its shareholder payout for the first time since World War 2.
So far 308 companies have clipped their dividends, bringing the total knocked off shareholder distributions since the Covid pandemic to £25.9bn.
SJP is ‘not immune’ to Covid fallout
News of the dividend cut comes as the wealth manager revealed it had taken a 13% hit to assets amid the coronavirus sell-off.
SJP’s funds under management toppled from £117.0bn at the end of last December to £101.7bn by the end of March. Closing FUM was 2% lower than the year before when assets hit £103.5bn.
Chief executive Andrew Croft (pictured) said that 2020 would be “another challenging year” for the business thanks to the coronavirus crisis.
“Whilst our business is resilient, we are not immune to how the unprecedented level of uncertainty may impact the operating environment for the business and our clients for the foreseeable future,” Croft said.
“It is therefore imperative that we have the ability and flexibility to continue providing clients with the quality of service they need through the partnership in scenarios that have the potential to become significantly more challenging.”
Net inflows at the wealth manager rose by 9% to £2.4bn in Q1, representing annualised growth of 8.1% on opening funds under management, which Croft attributed to improving investor sentiment following the outcome of the UK general election.
Croft added SJP had seen “robust” gross and net inflows in April albeit lower than the previous year.
Last year SJP faced one of its toughest periods as it endured accusations of an aggressive sales culture, which included lavish perks for top performers, such as cruise holidays and high-end cufflinks, and took a reputational hit over its ties to Neil Woodford.
In 2019 Croft took home a smaller pay package of £1.5m as SJP’s profits sank to £146.6m from £173.5m in 2018.
