St James’s Place: New business figures

7:43 a.m. Wed 19 Oct 2005

St James’s Place, the life assurance company reported 19% growth in new business in the nine months to September 2005. In the third quarter of the year, new business grew by 29%, driven growth in both single premium investment and pension business. It is pleasing to note that the growth achieved in the second quarter (when new business APE grew by 29%) has been sustained.

The pattern of growth has also been maintained with strong growth in investment products (+49%) and pensions (+15%) offsetting weaker protection (-5%) sales.

We have noted a gradual return of public confidence in the long-term insurance industry, which together with a weakening housing market is fuelling the demand for investment products, a trend we expect to continue for some time.

Strong sales in investment products have seen wealth management fees grow by 29% to £17.80m. Funds under management now stand at £11.4bn, up 20% since the start of the year and up 31% over the previous twelve months.

Prospects for growth look good; the company has a reputation for prudent management. The share trades at 247p, on a prospective PE (2005 earnings) of 15x which is higher than its peers, the premium being warranted by its more stable record. The yield is 1.2%.