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Quilter plc reports 5% growth in adjusted profit before tax to £115 million and an interim dividend of 1.7 pence per share

5 August 2019

Quilter plc interim results for the six months ended 30 June 2019


  • Adjusted profit before tax up 5% to £115 million (H1 2018: £110 million), of which:
    • £89 million, an increase of 7%, from Quilter excluding Quilter Life Assurance (‘QLA’) (H1 2018: £83 million); and
    • £26 million from QLA (H1 2018: £27 million).
  • Adjusted diluted earnings per share of 5.5 pence in line with H1 2018, of which:
    • 1 pence from Quilter excluding QLA (H1 2018: 4.1 pence); and
    • 4 pence from QLA (H1 2018: 1.4 pence).
  • Agreed disposal of QLA, subject to regulatory approval, to ReAssure for consideration of £425 million representing 120% of end 2018 own funds (after taking into account dividend payments of £130 million made to Quilter during the course of 2019). The Board is currently minded to undertake a meaningful capital distribution from the net sale proceeds to shareholders with the method of capital return subject to shareholder consultation. We will update on the amount and method of distribution at the closing of the transaction, expected to be late 2019.
  • IFRS loss before tax attributable to equity holders from continuing operations of £40 million (H1 2018: £nil), principally due to the period on period change in policyholder tax movements.
  • Interim dividend of 1.7 pence per share.
  • Operating margin stable at 29% including QLA (26% excluding QLA).
  • Assets under Management/Administration (‘AuMA’) up 8% from 31 December 2018 to £118.4 billion (FY 2018: £109.3 billion), of which:
    • £108.7 billion, an increase of 9%, from Quilter excluding QLA (FY 2018: £99.3 billion); and
    • £12.1 billion, a decrease of 2%, from QLA (FY 2018: £12.4 billion).
  • Gross sales (excluding QLA) of £6.0 billion (H1 2018: £7.9 billion, H2 2018: £6.3 billion).
  • Net Client Cash Flow (‘NCCF’) (excluding QLA) of £0.3 billion (H1 2018: £3.0 billion) with a modest (£0.2 billion) outflow in the second quarter predominantly attributable to the impact of expected client redemptions in Quilter Cheviot of c.£0.8 billion.
  • Integrated flows (excluding QLA) of £1.3 billion (H1 2018: £2.8 billion).
  • Solvency II ratio of 181% after payment of interim dividend (FY 2018: 190%).
  • UK Platform Transformation Programme is making good progress with final software testing in progress and validation of migration data integrity nearing completion. Initial migration expected by early 2020 and full programme expected to complete by around this time next year at an additional cost of approximately £25 million.
  • Business optimisation and cost saving initiatives progressing well with £11 million of benefits realised for 2019 providing support to the first half operating margin.

Paul Feeney, Chief Executive Officer, said:

”Quilter produced a solid set of results for the first half of 2019, as evidenced by growth in adjusted profit before tax with revenues growing modestly faster than costs and a stable operating margin. We are focussed on making Quilter a simpler, more efficient wealth management business, and the announcement today of the sale of Quilter Life Assurance is a further significant step forward in this regard.

“In addition to the Charles Derby Group acquisition announced in February 2019, I am delighted that we completed the acquisition of Lighthouse plc in June 2019, consolidating our place as the second largest retail advisory business in the UK. We are on a mission to make advice more valued and accessible, and want Quilter to be recognised as the best place to go for trusted financial advice in the UK.

“We are building a business that is fit for the future. Good progress continues to be made on optimisation and with the UK Platform Transformation Programme, notwithstanding the additional costs announced today. While we have encountered some short-term delays, we are focussed on ensuring the programme is implemented to our desired quality and still expect to complete the programme by this time next year.

“While the uncertain political environment in the UK evidenced in the latter half of 2018 has continued into 2019, gross new business sales have held up well at £6.0 billion. We experienced higher outflows in Quilter Cheviot following the resignation of some Investment Managers during 2018 putting pressure on net flows.

“The Board declared an interim dividend of 1.7 pence per share, representing a pay-out ratio of approximately 46% of adjusted profit after tax and based on an expected one third/two thirds dividend split. This is consistent with the dividend policy outlined at the time of our Listing one year ago.”


Quilter highlights from continuing operations1

H1 2019

H1 2018

Assets and flows



AuMA (£bn)2



Gross sales



NCCF (£bn)2



NCCF/opening AuMA (annualised) 4



Integrated flows (£bn)2



Productivity (£m)3



Asset retention5






Profit & loss



IFRS loss before tax attributable to equity holders (£m)



IFRS (loss)/profit after tax (£m)



Adjusted profit before tax (£m)2



Operating margin2



Revenue margin (bps)2



Adjusted diluted earnings per share (pence)2



Return on equity2









Restricted Financial Planners ('RFPs')



Investment Managers ('IMs')






Quilter highlights from continuing operations including Quilter Life Assurance

H1 2019

H1 2018

Assets and flows



AuMA (£bn)2



Gross sales



NCCF (£bn)2






Profit & loss



Adjusted profit before tax (£m)2



Operating margin2



Revenue margin (bps)2



Basic earnings per share (pence)2



Adjusted diluted earnings per share (pence)2



Return on equity2






1Continuing operations represent Quilter plc excluding results of QLA (for both 2018 and 2019) and the Single Strategy business (up to the date of sale which completed on 29 June 2018).

2Alternative Performance Measures ('APMs') are detailed on page 5.



3Average NCCF per Restricted Financial Planner.



4NCCF (annualised) as a % of opening AuMA (excluding Quilter Life Assurance).



5Outflows are calculated on an annualised basis.

Chief Executive's Review


Despite market uncertainty creating a more challenging environment, we have made good progress to make Quilter a simpler, more focussed, more efficient wealth management business. Our optimisation plans are on track, we added to our distribution franchise through the acquisitions of Charles Derby Group and Lighthouse plc, the final system testing and migration planning in respect of our new UK platform is well advanced, and this morning we announced the sale of our closed life assurance business, Quilter Life Assurance.

In July, we announced that the Board was undertaking a strategic review of Quilter Life Assurance. Following the conclusion of that review, we are pleased to announce a disposal of the business to ReAssure for consideration of £425 million, subject to obtaining the necessary regulatory approval. This represents 120% of end December 2018 pro forma own funds of £354 million after taking into account dividends of £130 million paid to Quilter in respect of historical profits during the course of 2019[1].

Quilter Life Assurance is predominantly a ‘closed life book’ where the existing products are closed to new business. With our new UK platform now close to completion, our ability to flexibly manage the Quilter Life Assurance cost base reduces and so, we believe, selling Quilter Life Assurance to a purchaser who specialises in running such businesses is in the best interests of Quilter Life Assurance’s policyholders, as well as our shareholders.

Accordingly, in line with IFRS 5, Quilter Life Assurance has been classified as a discontinued operation and designated as ‘held for sale’ in these results, with comparative results restated in compliance with the relevant accounting standards. Commentary on business performance has been stated on both a continuing business basis excluding Quilter Life Assurance, and based on the current perimeter to ensure full comparability. It should be noted that we expect the continuing Quilter group to have an operating margin of around five percentage points lower than the current perimeter, reflecting both the level of Quilter Life Assurance’s operating margin and potential stranded costs, some of which are transitory in nature. This will lead to a commensurate reduction in the starting point for our operating margin upon which our targeted 2020 and 2021 operating margin improvement will be based.

The Board is currently minded to make a meaningful capital return to shareholders arising on the net surplus proceeds from the sale. We intend to consult with our shareholders on the most appropriate means of undertaking this, and will announce the quantum and method of any potential capital return at the time of closing, expected by late 2019.

Business conditions in the first half of 2019 have been the opposite of those experienced in the same period last year. In the first half of 2018, Quilter benefited from strong new business flows and a limited contribution from positive market movements. By contrast, 2019 net flows have been more muted while the market rebound has been stronger than we expected at the beginning of the year, thereby supporting our revenue.

Against this backdrop, I am pleased with our adjusted profit before tax (including Quilter Life Assurance) for the first half of 2019 of £115 million, up 5% on the prior period. This reflected stable revenue margins coupled with broadly unchanged average AuMA and was supported by strong cost discipline and our optimisation activities. Total expenses increased modestly as investment in the business through our distribution acquisitions took effect as expected, and the normalisation of the charge for the FSCS levy was reflected in the 2019 result. Underlying costs, excluding the impact from acquisitions, were broadly unchanged on 2018, in line with the guidance provided at full year. 

Adjusted diluted earnings per share of 5.5 pence, of which 4.1 pence was from Quilter’s continuing business and 1.4 pence from Quilter Life Assurance, is broadly unchanged on the first half of 2018. This is due to a more normal tax rate of 12% accrued on adjusted profit and a slightly higher number of shares eligible to receive dividends. The actual tax rate will be determined at the end of the year.

The Board is pleased to declare an interim dividend totalling 1.7 pence per share, inclusive of a distribution of 0.43 pence per share in respect of Quilter Life Assurance’s first half profit contribution. The Board expects the Group’s dividend pay-out ratio will move up within the target range in 2019. In normal circumstances, we expect the interim dividend to represent roughly one third of the annual pay-out, as set out in our prospectus at the time of Listing.

Our financial performance is discussed in more detail below.


Delivering good customer outcomes through a trusted advice relationship is core to the Quilter business model. The platform is at the centre of our business providing the investment ‘wrappers’ to meet an individual’s needs, while our investment solutions provide the intellectual capital to deliver the outcomes that our clients seek. Excellent service delivery underpins the customer and adviser experience. Confidence in our proposition is demonstrated through both the continued attraction of our solutions to independent financial advisers and the resilience of our integrated flows.

While gross client cash flows (excluding Quilter Life Assurance) into the business have remained relatively solid at £6.0 billion (down 5% on the second half of last year), as already noted, 2019 has been challenging in terms of NCCF. NCCF (excluding Quilter Life Assurance) of £0.3 billion during the first half of 2019 was down from £3.0 billion in the comparable period of 2018. As well as general market uncertainty caused by Brexit and broader geopolitical and macro-economic concerns, the first half of 2019 result includes two Quilter-specific issues. First, despite gross sales into Quilter Cheviot being in line with expectations, the departures of a small group of Investment Managers, who resigned in summer 2018, have begun to have an impact on outflows in that business. During the first half, we recorded outflow requests totalling £0.6 billion from clients looking to follow their Investment Managers who departed last year. We expect this pressure to continue at a similar level through the remainder of 2019. Secondly, we completed the transfer of the previously disclosed loss of a quasi-institutional £0.2 billion mandate in Quilter Cheviot late in the second quarter. In addition, due to market uncertainty, we have experienced a lower level of new gross flows onto our platform from both our restricted advisers and independent financial advisers. This has led to lower levels of flow into Quilter Wealth Solutions and Quilter Investors with the combination of these factors leading to lower net flows. Overall levels of client retention across the business were broadly unchanged, outside of the impact from the Quilter Cheviot departures.

Quilter International’s modest NCCF was broadly in line with the prior year. This reflects our strategy of repositioning our business to have deeper roots in fewer markets, and to ensure the product range and client offering across our international markets is consistent with Quilter’s risk appetite in all markets where we operate.

AuMA, including Quilter Life Assurance, increased by 8% from £109.3 billion at 31 December 2018 to £118.4 billion at the end of the first half of 2019. The market recovery began late in the first quarter and broadly maintained these levels in the second quarter, with the FTSE-100 up 10% overall during the first half of the year. This led to average AuMA of £114.4 billion, the principal driver of management fee revenue, stable on the levels experienced in the first half of 2018 (£114.5 billion).


Quilter’s overall financial performance for the first half of 2019 was good. Adjusted profit before tax for the first half of 2019 of £115 million comprised £89 million from continuing operations (+7%) and £26 million in respect of QLA (-4%). Our IFRS loss before tax from continuing operations was £40 million, compared to a profit of £nil million in the first half 2018. We achieved a 29% operating margin (H1 2018: 29%), including Quilter Life Assurance, in line with first half 2018. Optimisation benefits and cost reductions offset the drag on the operating margin from the acquired advice businesses. The Lighthouse plc acquisition completed late in the period and consequently did not have a material impact on the Group’s results. The combined effect of the acquisitions of Charles Derby Group and Lighthouse plc contributed to a one percentage point reduction in the operating margin.

The Lighthouse plc acquisition added 390 advisers to our business of which 143 are RFPs with the remainder currently independent financial advisers. We are enhancing the Lighthouse restricted proposition by using our solutions that are specifically designed to meet the needs of customers of our advice business. Additionally we expect a number of the independent advisers to convert to a restricted proposition based upon the ability of our propositions to meet their customers’ needs. Excluding acquisitions, we achieved good growth in RFPs across our appointed representative firms, adding a net 39 RFPs across the firm representing annualised organic growth of 5%.

Our solutions have continued to deliver good investment performance for our clients. The medium and long-term performance at Quilter Cheviot, our discretionary fund management business, continued to outperform relevant ARC benchmarks, remaining first or second quartile, to the end of March. The medium and longer-term performance of Quilter Investors’ multi-asset funds has also remained strong, although the shorter-term performance on the biggest range, Cirilium, has been more mixed reflecting some tactical positioning over the course of last year. We are in the process of simplifying and broadening the Quilter Investors product range through fund consolidation and new product launches over the remainder of the year. These new products, including our new multi-asset income suite and Cirilium blend proposition, are being launched in response to the specific needs of our customers, based upon direct research we conducted through our advice business.

Following the previously announced Investment Manager resignations from Quilter Cheviot after our Listing, we have focussed on adding to the Quilter Cheviot investment team and our Investment Manager headcount was back to 163 at the end of June 2019 from a low of 155 at the end of December 2018. Although we anticipate continued elevated outflows in the near term, we expect our new hires to contribute to overall growth in Assets under Management over time.


As I have said previously, we are focussed on completing the transformation of our business through:

  • Delivering the expected benefits from the implementation of our UK Platform Transformation Programme;
  • Making Quilter a simpler and more focussed business. As with Charles Derby and Lighthouse this may mean making selective infill acquisitions into our core business and, as we have shown with Old Mutual Global Investors and Quilter Life Assurance, we have also undertaken disposals of non-core businesses to simplify our group; and
  • Optimising our business by delivering the operating margin targets we set out in March 2019 as well as driving operational leverage through scaling up our UK Platform and investment solutions business, while investing to drive productivity.

In respect of our new UK platform, we are in the final delivery stages of the programme. The lessons learned from our soft-launch phase have been valuable and we are delighted with the improved functionality that the new platform delivers. In addition, our plans to ensure our customers and advisers are prepared for the migration are progressing well. However, the final delivery of the platform is expected to take approximately three months longer than planned. This is driven by the complexity of the programme and our commitment to a high quality outcome.

The validation of the data to be migrated to the new platform is nearing completion with very high data integrity scores. Following the final delivery of the platform, our migration plan incorporates several dress rehearsals to minimise risk and we will not compromise on that preparation period. We will then execute an initial migration of up to 10% of platform assets representing clients from up to 100 of our adviser firms which we expect to complete by early 2020. The migration of the remainder of the book is expected to complete by around this time next year.

At our full year results in March, we indicated that an extension of the project into 2020 would lead to modest additional programme costs. Therefore, given our update on the timing provided today, together with additional activities to reduce risk, including incremental call centre capacity and technical support, we have now quantified additional costs of approximately £25 million above the previously targeted £160 million. This c.15% increase in costs reflects our focus on delivering the new platform and the associated migration safely and securely and is in the interest of all stakeholders. As we enter the final phase of this programme we look forward to the significant benefits that the new platform will bring to customers, our advisers and our business. We remain completely confident that this programme will deliver enhanced functionality, superior performance and will contribute considerably to our market competitiveness.

We are pleased with both the Charles Derby Group and Lighthouse plc acquisitions which completed in the first half of the year. Our initial post-completion work with the Lighthouse team has validated the original acquisition assumptions, and integration workstreams are well underway. These acquisitions will provide a full scale, UK-wide footprint for our nationally branded advice business and will allow us to accelerate our growth plans. We are on a mission to make advice more valued and accessible, and we want Quilter to be recognised as the best place to go for trusted financial advice in the UK.

Our broader optimisation plans also continue to progress well. Late last year and early this year our focus has been on initiatives with short-term returns such as supplier contract renegotiation and driving savings in property and facility costs. Over the remainder of 2019 and beyond, our workstreams are increasingly focussed on delivering the longer-term sustainable cost savings which will allow us to deliver the planned operating margin improvements in 2020 and 2021. This will be achieved through technology enabled transformation, such as implementing a single payroll system and general ledger. We have started the consolidation of the support functions which is designed to create synergies across the business by removing duplication and ensuring tasks are only performed once. This has already contributed to our lower costs in activities such as finance and marketing. I am also pleased that we have met our target of broadly unchanged costs, excluding acquisitions, in the first half of 2019 and rather than declining, as we indicated in March, our overall operating margin is stable on the first half of last year despite absorbing costs from our advice acquisitions. Excluding the impact of these incremental costs, we would have delivered a one percentage point period on period improvement in the operating margin.


At our 2019 AGM on 16 May, shareholders approved the reappointment of KPMG as our auditors for the 2019 financial year. We advised shareholders in our 2018 Annual Report that we would be conducting an external audit tender this year. Given the longevity of KPMG’s tenure as our auditors they did not participate in the audit tender process, which has now completed. We are pleased to announce that the Quilter Board, on the recommendation of the Audit Tender Sub Committee, chaired by Rosie Harris, has appointed PwC as auditors for future reporting periods commencing on 1 January 2020. A resolution for the appointment of PwC as auditors will be submitted for shareholder approval at our 2020 AGM.

Two resolutions at our 2019 AGM attracted a meaningful level of votes against from shareholders. The resolution to authorise Directors to allot shares was not passed, with only 49.5% of shares voted in favour. Additionally, the resolution to authorise political donations only received 75% support. Notably, there was a significant difference in voting between the South African and UK share registers on these two resolutions. On the UK register, the resolutions seeking the authority to allot shares and the authority to make political donations had 97% and 99% support respectively. On the South African register, those resolutions had only 18% and 61% support. In respect of both resolutions, similar voting patterns are seen at other dual UK/South Africa listed companies with the position exacerbated by the significant proportion of South African shareholders on our share register. As at end June 2019, the Quilter share register is split 63%:37% between the Johannesburg Stock Exchange and London Stock Exchange respectively. 

In line with the guidelines in the 2018 UK Corporate Governance Code, we have sought to fully understand the views of South African shareholders on both of these resolutions through a series of meetings undertaken early in July 2019. From these discussions, it is clear that in a current South African governance context, any linkage between business and politics is emotive. Quilter has no intention of undertaking political donations but, in line with other listed UK companies, has sought such authority to avoid any inadvertent breaches of UK company law. We believe our South African shareholders now have a better understanding of the purpose behind this resolution.

We also understand that for historical reasons, the reluctance to delegate authority to company directors to issue shares is embedded in South African investment philosophy. The ‘Authority to Allot Shares’ is a standard enabling resolution for UK companies and the authority sought by Quilter at the 2019 AGM was in line with UK Investment Association guidelines. While our capital position is currently strong and we have no plans to raise equity, we are concerned that not having such an authority could, at some point, disadvantage Quilter relative to our UK peers. We wish to avoid such an outcome and expect to continue to engage to agree a delegation of authority at a level acceptable to a significant majority of our shareholders. The Board will consider therefore whether to continue seeking such an authority on either a similar or amended basis at the 2020 AGM, depending on the outcome of these ongoing discussions.


We monitor employee engagement on a quarterly basis, and I am delighted feedback from these reviews continues to be at a consistently high level. Ensuring Quilter brand consistency and strengthening the ties that bind our people to deliver our purpose is a core focus for us. As part of our transition to a single Quilter brand across our business, Intrinsic rebranded to Quilter Financial Planning in July and feedback from both staff and advisers has been overwhelmingly positive. The move to the Quilter brand allows our network advisers to enhance their relationship with their clients by demonstrating the backing of a strong FTSE-250 listed business and for staff it reinforces their importance to the broader Quilter business.


As previously discussed, 2019 was always expected to be a transitional year for Quilter. The flow environment is likely to remain challenging in the near-term. While overall equity market levels have been supportive so far in 2019, we are conscious that market confidence remains fragile. As well as having to manage through these external factors, we will continue to deal with the outflows in Quilter Cheviot associated with last year’s Investment Manager departures and, as we lead up to and move through the UK Platform migration, we expect new customer flows onto our existing platform to remain subdued. As a consequence, in this context, we remain committed to delivering broadly flat costs in 2019, excluding the impact of acquisitions.

Our near-term agenda remains focussed on four key priorities:

  • First, and most importantly, we will successfully implement our new UK platform, ensure a smooth migration for existing customers and deliver on the growth opportunity, once implemented.
  • Second, integrate our advice acquisitions and build our national advice business into a full scale UK wide business.
  • Third, execute on our optimisation plans to deliver operating leverage and higher shareholder returns.
  • Finally, we want to make Quilter a simpler and more focussed wealth management business, as we have demonstrated with the sale of Quilter Life Assurance.

Each of these priorities is on track and as we look towards 2020 and beyond, we remain excited as to our growth prospects and have confidence in our strategic path. By this time next year we will have migrated to a new, modern platform with greater product scope and significantly better automation and resilience. Advisers supported by Quilter will also have an upgraded and streamlined payments system, a new and improved point of sale system, upgraded adviser and client portals and, reflective of the world we live in, stronger security controls to protect our adviser and client data. Although the external environment is more challenging than a year ago, operationally we are where we expected to be at this stage as we continue to deliver value for all our stakeholders.


Paul Feeney

Chief Executive Officer


Click here to review full financial performance.


[1] Reported own funds at 31 December 2018 were £394 million, stated after a foreseeable dividend of £90 million paid in March 2019, but before a further dividend of £40 million anticipated to be paid in Q3 2019 prior to completion; for the avoidance of doubt, neither of these dividends form part of the consideration to be received of £425 million.


Quilter plc results for the six months ended 30 June 2019


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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, the implications and economic impact of several scenarios of the UK leaving the EU in relation to financial services, 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.


Business unit descriptor:

Previous Business Unit Name

New Business Unit Name

Advice & Wealth Management



Quilter Investors

Quilter Cheviot

No change


Quilter Financial Planning

Old Mutual Wealth Private Client Advisers

Quilter Private Client Advisers

Wealth Platforms


UK Platform

Quilter Wealth Solutions


Quilter International


Quilter Life Assurance