Wrap Text
Capital Markets Day
QUILTER PLC
Incorporated under the Companies Act 1985 with registered number 06404270 and re-registered as a
public limited company under the Companies Act 2006)
ISIN CODE: GB00BDCXV269
JSE SHARE CODE: QLT
Quilter plc (the "Company")
3 November 2021
Quilter plc Capital
Markets Day
Quilter plc (the “Group”) sets out a strategic focus on growth and efficiency,
targets operating profit to more than double by 2025
Planned return of c.£350 million from Quilter International disposal proceeds to
accompany 2021 Full Year results
Business Update
Quilter will be hosting a Capital Markets Day today which will set out a range of targets and
update on plans for a return to shareholders from the Quilter International sale proceeds.
As part of its strategic ambitions to drive growth, the Group will reorganise into two new
client-focussed segments: High Net Worth and Affluent.
A full breakdown of unaudited pro forma financials for the new segments for first half 2021
and full year and half year 2020, and full year 2019 is included as an appendix to this
announcement.
Strategic Update
Since Listing in June 2018, Quilter has focussed on simplifying its business model,
optimising its cost base, selling businesses it regarded as non-core and returning the
proceeds from disposals to shareholders. With the sale of Quilter International, the
reshaping of the Group’s corporate perimeter is now complete, and the Group is able to
pivot to a strategy which embraces growth and efficiency.
New information set out in today’s presentation will include the following:
• Quilter will reaffirm its 6%+ annual net flow target from 2022 onwards and its
operating margin targets of at least 25% by 2023 and 30%+ by 2025, and will
provide greater granularity on plans to reach those targets.
• The Group will provide an updated cost target, with full-year continuing costs for
the year to December 2021 now expected to be less than £500 million.
• The Group will announce a new Simplification initiative to reduce operating costs
by around £45 million by end-2024 on a run-rate basis. Costs to achieve of £55
million are expected to fund this programme and will be treated as a below the
line expense.
• Through delivery of these targets, Quilter expects its 2025 adjusted profit to be at
least double the level achieved in 2020 (on a continuing business basis), with this
contributing to mid-teens compound EPS growth through 2025 from the 2020
continuing business base.
• A revised Group dividend policy. The new policy sets a target pay-out range of 50%
to 70% of post-tax, post-interest adjusted profits, revised from 40% to 60% of post-
tax adjusted profits previously.
Capital Return
The sale of Quilter International to Utmost continues to progress in line with previous
announcements, with completion anticipated prior to year-end 2021.
• The Group expects gross cash proceeds of c.£480 million from the sale. This
represents the base sale price of £460 million plus a c.£20 million ticker
representing interest on the base sale price since 1 January 2021.
• After costs of c.£40 million, representing transaction expenses and separation
costs relating to the transaction, the Group expects net sale proceeds to be c.£440
million.
• Quilter is currently minded to return c.£350 million to shareholders and retain
c.£90 million to fund the Group’s Simplification programme and to invest in select
longer-term revenue growth initiatives. These will include building out a hybrid
advice distribution channel and further digitalisation of Quilter’s business, which
the Group will discuss during today’s Capital Markets Day presentation.
The £350 million proposed return to shareholders is currently expected to comprise:
• an estimated £25 million contribution to the Group’s Full Year dividend from a pro
rata to 2021 earnings contribution from Quilter International, reflecting the “locked
box” nature of the disposal agreement; and
• a £325 million special return to shareholders through either payment of a special
dividend or through issuance and redemption of B-shares.
The special return to shareholders will be accompanied by an ordinary shareconsolidation.
The proposed return to shareholders and ordinary share consolidation willbe subject to
the normal year-end process, regulatory approval, and any required shareholder
approval(s) at a General Meeting. The Quilter Board currently expects to review and
formally propose the special return and share consolidation to shareholders alongside the
Full Year 2021 results. It is currently expected that the capital return process will be
completed during the first half of 2022.
Paul Feeney, Chief Executive Officer of Quilter plc, commented:
“Three years on from our Listing, we have successfully concluded the initial phase of our
strategic journey. Selling Old Mutual Global Investors, Quilter Life Assurance and Quilter
International have simplified our operating model, removed businesses that weighed on
our growth trajectory and together have allowed us to undertake special capital returns of
around £1 billion to our shareholders.
“We now look forward to executing the next stage of Quilter’s strategic journey which will
be characterised by a focus on growth and efficiency. We are excited about our plans to
grow our business, increase operating efficiency and to deliver our target of more than
doubling operating profits by 2025 and we will set these out at our Capital Markets Day,
later this morning.”
Enquiries
Investor Relations:
John-Paul Crutchley +44 (0)7741 385 251
Keilah Codd +44 (0)7776 649 681
Media:
Tim Skelton-Smith +44 (0)7824 145 076
Camarco:
Geoffrey Pelham-Lane +44 (0)20 3757 4985
Company Secretary:
Patrick Gonsalves +44 (0)20 7778 9670
J.P. Morgan Equities South
Africa (PTY) LTD
About Quilter plc
Quilter plc is a leading wealth management business in the UK and internationally, helping
to create prosperity for the generations of today and tomorrow. Quilter plc oversees
£108.5 billion in customer investments (as at 30 September 2021).
It has an adviser and customer offering spanning: financial advice, investment platforms,
multi-asset investment solutions, and discretionary fund management.
The business is being reorganised into two segments: Affluent and High Net Worth.
Affluent encompasses the financial planning businesses, Quilter Financial Planning, the
Quilter Investment Platform and Quilter Investors, the Multi-asset investment solutions
business.
High Net Worth includes the discretionary fund management business, Quilter Cheviot,
together with Quilter Private Client Advisers.
Disclaimer
This announcement may contain certain forward-looking statements with respect to
certain Quilter plc’s plans and its current goals and expectations relating to its future
financial condition, performance and results.
By their nature, all forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances which are beyond Quilter plc’s control including
amongst other things, international and global economic and business conditions, market
related risks such as fluctuations in interest rates and exchange rates, the policies and
actions of regulatory authorities, the impact of competition, inflation, deflation, the timing
and impact of other uncertainties of future acquisitions or combinations within relevant
industries, as well as the impact of tax and other legislation and other regulations in the
jurisdictions in which Quilter plc and its affiliates operate. As a result, Quilter plc’s actual
future financial condition, performance and results may differ materially from the plans,
goals and expectations set forth in Quilter plc’s forward-looking statements.
Quilter plc undertakes no obligation to update the forward-looking statements contained
in this announcement or any other forward-looking statements it may make. Nothing in
this announcement should be construed as a profit forecast.
Quilter plc unaudited pro forma disclosure supplement
Segment view Quilter plc (continuing) High Net Worth Affluent
2019 H1 2020 FY 2020 H1 2021 2019 H1 2020 FY 2020 H1 2021 2019 H1 2020 FY 2020 H1 2021
Gross sales (£bn) 10.6 5.3 9.8 6.7 2.6 1.2 2.1 1.3 8.0 4.1 7.7 5.4
NCCF (£bn) (0.3) 1.0 1.5 2.0 (0.8) 0.2 0.3 0.4 0.5 0.8 1.2 1.6
NCCF / Opening AUMA -0.4% 2.2% 1.6% 4.0% -3.6% 1.7% 1.2% 3.2% 0.8% 2.3% 1.8% 4.3%
Market, ccy & other (£bn) 10.8 (3.7) 5.1 5.4 2.8 (1.1) 0.8 1.3 8.0 (2.6) 4.3 4.1
Growth drivers Closing AUMA (£bn) 92.4 89.7 99.0 106.4 24.2 23.3 25.3 27.0 68.2 66.4 73.7 79.4
Of which Quilter Investment Platform n/a n/a n/a n/a n/a n/a n/a n/a 58.6 57.5 63.8 69.4
Of which Quilter Investors n/a n/a n/a n/a n/a n/a n/a n/a 21.6 20.8 23.2 24.8
Of which eliminations n/a n/a n/a n/a n/a n/a n/a n/a (12.0) (11.9) (13.3) (14.8)
Average AUMA (£bn) 87.2 87.8 90.2 101.7 23.6 22.9 23.3 25.8 63.6 64.9 66.9 75.9
Net management fee (£m) 469 220 446 242 171 84 168 93 298 136 278 149
Other revenue (£m)1 118 59 118 62 25 13 25 12 90 44 92 50
Profit & loss
Expenses (£m)2 (460) (232) (456) (248) (155) (79) (154) (79) (269) (134) (265) (155)
Adjusted profit (pre-tax) (£m) 127 47 108 56 41 18 39 26 119 46 105 44
Operating margin % 22% 17% 19% 18% 21% 19% 20% 25% 31% 26% 28% 22%
Revenue margin (bps) 54 50 49 48 72 73 72 72 47 42 42 39
Margins Of which Quilter Investment Platform n/a n/a n/a n/a n/a n/a n/a n/a 31 29 29 27
Of which Quilter Investors n/a n/a n/a n/a n/a n/a n/a n/a 60 53 53 51
Asset retention % 87% 91% 91% 91% 85% 92% 93% 93% 87% 90% 90% 90%
IFRS profit pre-tax (£m) (25) (25) 9 27 n/a n/a n/a n/a n/a n/a n/a n/a
Statutory view
IFRS profit post-tax (£m) (90) 11 13 (13) n/a n/a n/a n/a n/a n/a n/a n/a
Restricted Financial Planners (#) 1,725 1,724 1,765 1,639 n/a n/a n/a n/a 1,725 1,724 1,765 1,639
RFP Productivity n/a n/a n/a n/a n/a n/a n/a n/a 1.3 1.1 0.9 1.9
Other KPIs
Client facing individuals 229 231 231 230 229 231 231 230 n/a n/a n/a n/a
Return on equity (%) 8.2% 4.5% 5.8% 7.3% n/a n/a n/a n/a n/a n/a n/a n/a
Adjusted basic EPS (pence) 5.8 2.3 5.3 3.4 n/a n/a n/a n/a n/a n/a n/a n/a
Capital
Adjusted diluted EPS (pence) 5.7 2.2 5.2 3.3 n/a n/a n/a n/a n/a n/a n/a n/a
1
Other revenue includes Head Office of £3m in 2019, £1m in FY 2020 and £2m in H1 2020.
2
Expenses includes Head Office of £36m in 2019, £37m in FY 2020, £19m in H1 2020 and £14m in H1 2021.
Date: 03-11-2021 09:00:00
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