Private client sales to soar at St James’s
ST JAMES’S PLACE (SJP), the upmarket wealth manager, will try to dispel bad publicity around former partner Peter Carron when it announces soaring first half sales on Wednesday.
The FTSE 250 firm is expected to say new business was up 31 per cent in the six months to June to £266m. Operating profits will increase 34 per cent to £135m, according to analyst consensus. Pre-tax profits are predicted to be slightly lower at £31.7m.
The City is betting on a dividend of 1.95p per share.
SJP will hope the figures restore focus on the company’s performance after a series of headlines about Carron, an ex-partner who is being investigated by City of London police over a suspected £4m fraud through his separate company, Primrose.
The interim results may also encourage Lloyds Banking Group to dispose of its 60 per cent stake. Lloyds has been considering the move for some time and the expectation of such a large placing at a discount has been overhanging SJP’s stock.
Panmure Gordon’s Barrie Cornes, who has a “buy” rating on the shares, said last week: “We believe the share price is out of kilter with the inherent value of SJP. The timing and price of any [Lloyds] sale remains uncertain, but in our view this has created an excellent buying opportunity.”
Cornes predicted a sharp rally after Lloyds’ eventual disposal of its shareholding. Irrespective of the sale, he said there was “significant upside potential” in the stock over the longer term due to its brand and distribution.
SJP’s paper closed at 245.7p on Friday, valuing the business at £1.2bn. Panmure Gordon has a price target of 345p per share.