St. James’s Place has announced an increase in pre-tax profits for its distribution arm by 5 per cent to £6.1m in 2011, compared to £5.8m in 2010.
The firm’s overall pre-tax profits fell 86 per cent on an IFRS basis from £161.9m in 2010 to £21.3m in 2011 while pre-tax profits on an EEV basis for the business fell 58 per cent from £455m to £190.8m.
The IFRS profit before shareholder tax for 2011 was £109.7m, an increase of 30 per cent compared to £84.2m in 2010, when accounting for an £88.4m tax credit in 2011.
SJP chief executive David Bellamy says the drop in pre-tax profits is a result of investment return variance which rose 53 per cent from £117.6m in 2010 to £180.4m in 2011.
He says: “It is a consequence of the calculation of embedded value it is not a consequence of the performance of the business. If stock markets rise through the year then you will see that investment return variance come shooting back in.”
Bellamy added that although a small number of advisers will exit the business by the end of 2012, it expects to see its overall adviser numbers increase over the year.
He says: “Recently we have seen a year-on-year increase of between 5 and 6 per cent and we would expect to see that again in 2012.”
The firm saw an increase of 6 per cent in its adviser numbers in 2011, taking the total to 1,649.