TIDMQLT
RNS Number : 1353R
Quilter PLC
03 November 2021
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.GBP350 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 GBP500 million.
-- The Group will announce a new Simplification initiative to
reduce operating costs by around GBP45 million by end-2024 on a
run-rate basis. Costs to achieve of GBP55 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.GBP480 million
from the sale. This represents the base sale price of GBP460
million plus a c.GBP20 million ticker representing interest on the
base sale price since 1 January 2021.
-- After costs of c.GBP40 million, representing transaction
expenses and separation costs relating to the transaction, the
Group expects net sale proceeds to be c.GBP440 million.
-- Quilter is currently minded to return c.GBP350 million to
shareholders and retain c.GBP90 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 GBP350 million proposed return to shareholders is currently
expected to comprise:
-- an estimated GBP25 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 GBP325 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 share consolidation. The proposed return to shareholders
and ordinary share consolidation will be 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 GBP1 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."
Appendix:
Quilter plc unaudited pro forma disclosure supplement
http://www.rns-pdf.londonstockexchange.com/rns/1353R_1-2021-11-2.pdf
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
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 GBP108.5
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.
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