UPDATE 1-Wealth manager St James's Place ups dividend by a third

Thu Feb 28, 2013 3:34am EST

Related Topics

* Full year dividend up 33 pct to 10.64 pence

* Profit before shareholder tax 134.6 mln stg, up 23 pct

* New business profit up 13 pct at 276.8 mln stg

By Chris Vellacott

LONDON, Feb 28 (Reuters) - British investment manager St James's Place has raised its dividend by a third and plans a similar increase in the coming year, channelling the benefits of robust business flows to shareholders.

St James's Place, which manages money for well-heeled individuals and wealthy families, said on Thursday its continued client appeal had boosted cash flow by more than a third in the year to Dec. 31, a year in which many rivals floundered.

"The continuing growth and maturity in funds under management has, as expected, translated into strong growth in the cash result," chief executive David Bellamy said.

St James's Place is majority owned by Lloyds Banking Group and sells a broad range of financial products including a suite of mutual funds hand-picked from across the industry.

It has defied the financial crisis with consistent flows of new funds from its mainly affluent clients who want to protect nest eggs from the ravages of low interest rates as they near retirement.

Bellamy told Reuters that in addition to building up reserves of cash to maintain dividend payments, the company was using cash to build a "strategic pot" for future business opportunities including possible expansion overseas.

"If we do want to look at anything overseas, banking services or discretionary fund management, then we've got some capability to go and do that," Bellamy said.

The company has looked into possibilities but it has no immediate takeover plans, he added.

Business growth was driven by a 22 percent rise in funds under management to 34.8 billion pounds, lifted by recovering markets and a 3.35-billion-pound net inflow of new money.

Analysts at Numis Securities cheered the results as "a little ahead on most measures." New business profit at 276.8 million pounds, up 13 percent from a year earlier, outpaced Numis's estimates of 271 million pounds.

St James's Place shares were trading flat at 484.8 pence shortly after the market open, against a FTSE 250 mid cap index up 0.45 percent.

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