Quilter (QLT) H2 2024 earnings summary

Executive summary

• Achieved strong profit growth and higher operating margins in 2024, with adjusted profit before tax up 46% to £196 million and operating margin at 29%, surpassing the 25% target for 2025.

• Core net inflows surged 525% year-over-year to £5.2 billion, reflecting significant improvement in business momentum.

• Adjusted diluted EPS increased 13% to 10.6 pence, and the recommended dividend grew 13% to 5.9 pence, maintaining a 59% payout ratio.

• Provision of £76 million recognized for client remediation following an ongoing advice review.

• Strategic initiatives included the acquisition of NuWealth, digital enhancements, and adviser productivity improvements.

Financial highlights

• Revenue grew 7% year-over-year to £670 million, driven by strong net flows and supportive market conditions.

• Operating expenses increased 3% to £474 million, less than half the revenue increase, supporting growth and transformation.

• Adjusted profit before tax increased 46% over two years; operating margin improved by 2 percentage points to 29%.

• Solvency II ratio remained robust at 219% after dividend payment.

• High-net-worth profit up 17% to £48 million; affluent profit up 19% to £148 million.

Outlook and guidance

• Expect mid to high single-digit profit growth in 2025, with acceleration in 2026, assuming stable markets and rates.

• Net flows guidance of 4-5% of opening AuMA through the cycle, with operating margin targeted around 30% on a gradually improving trajectory.

• Platform margin expected to decline by about 1 basis point per year as interest rate benefits ease.

• Cost base expected at c.£500 million in 2025, with increased investment in growth and bolt-on acquisitions.

• Operating margin aim is to sustainably exceed 30% while investing in growth and technology.