St James’s Place tumbles on provision for client refunds
Wealth manager St James’s Place has seen a significant downturn in profits as it announced a £426mn provision for potential client refunds.
It has also slashed its dividend all of which saw shares down by almost a third after an hour of the London session. It said that it had received a significant number of complaints from clients late last year over whether they had received a sufficient level of service, prompting the group to make the provision.
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St. James's Place
St James's Place, a wealth management company, has faced some major setbacks. The company has seen a significant drop in the market and has even swung to a full-year loss. As a result, they have made the decision to cut their dividend and set aside a sizable amount of money, £426 million, for potential customer refunds.
The company's performance
This decline in the company's performance is clearly reflected in their share price chart, which shows a massive 31.5% decrease. In fact, the stock is currently at its lowest point since December 2012, hitting an unfortunate 11-year low. St. James's Place has reported a post-tax cash result of £68.7 million, which is a sharp decline compared to the £410 million in the same period last year.
The main reason for this drop in profit is attributed to a one-time cost of £426 million. The company explains that these costs are connected to potential refunds related to the historic delivery of ongoing services to their clients. This situation further worsens an already challenging market for asset managers. With these ongoing struggles, St. James's Place is now trading at levels that haven't been seen in 11 years, which presents even more difficulties for the company.
St. James's share price
To put it simply, St. James's Place, a wealth management company, has faced a tough day in the stock market. They have experienced a major drop in their share price, resulting in a full-year loss. To make matters worse, they have had to cut their dividend and set aside a large amount of money for potential customer refunds. This decline in profit is due to a one-time cost related to providing ongoing services to their clients. With these challenges, St. James's Place is now trading at levels that haven't been seen in 11 years, adding more struggles for the company to overcome.
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