REG - Quilter PLC - Quilter plc - 2025 Half Year Results Part 1
Wed 07:00
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RNS Number : 1224U Quilter PLC 06 August 2025
6 August 2025
Quilter plc interim results for the period ended 30 June 2025
Quilter reports adjusted profit of £100 million and H1 2025 core net inflows
of £4.5 billion representing 8% of opening AuMA (annualised)
Steven Levin, Chief Executive Officer, said:
"I'm pleased with our start to 2025. Flow momentum remains excellent with our
Affluent and High Net Worth segments both outperforming their market peers for
level of inflows and growth as a percentage of opening assets. This clearly
demonstrates the powerful nature of our dual-distribution model. Our business
has built on the momentum of the last two years, is in great shape and is
continuing to deliver on the growth opportunities ahead."
Highlights:
· Total Assets under Management and Administration ("AuMA")
increased by 6% since year end to £126.3 billion reflecting net inflows of
£4.3 billion coupled with a positive contribution from markets despite US
Dollar weakness over the period. Core net inflows of £4.5 billion represented
an annualised 8% (H1 2024: 3%) of opening AuMA (7% reported after non-core net
outflows).
· Platform Assets under Administration ("AuA") increased by 8% to
£92.0 billion since year-end. First half Platform net inflows of £4.2
billion (H1 2024: £ 2.2 billion) were up 92% on the first half of 2024 and
represented 10% (annualised) of opening AuA. Total assets under management by
WealthSelect, the UK's largest Managed Portfolio Service ("MPS") reached
£21.0 billion, an increase of 14% from December 2024.
· The High Net Worth segment delivered a strong improvement in net
inflows to 3% (annualised) of opening assets (H1 2024: 1%).
· Adjusted profit before tax increased by 3% to £100 million (H1
2024: £97 million) with a percentage point improvement in the operating
margin to 30% (H1 2024: 29%).
· Revenues grew by 2% to £337 million (H1 2024: £329 million)
reflecting higher management fee revenue partially offset by lower investment
revenue generated on shareholder funds. Cost control limited cost growth to
2%, taking the expense base to £237 million (H1 2024: £232 million).
· Our Simplification programme has now achieved £43 million of
savings on a run-rate basis, with the remaining £7 million of the £50
million target expected to be delivered, on a run-rate basis, by the end of
2025.
· Adjusted diluted earnings per share of 5.4p increased by 4% (H1
2024: 5.2p), broadly in line with the increase in adjusted profit.
· Net increase of 14 Quilter Restricted Financial Planners
("RFP's") to 1,454 and four Investment Managers to 180 since December 2024.
· Ongoing Advice Review: Skilled Person Review submitted to the FCA
with discussions now focused on the implementation of a likely remediation
programme. Previously recognised provision remains appropriate.
· IFRS profit after tax of £46 million (H1 2024: £13 million).
· Interim Dividend of 2.0 pence per share (H1 2024: 1.7 pence per
share), representing an increase of 18%.
· Solvency II ratio of 214% after payment of Interim Dividend (31
December 2024: 219%).
Key financial highlights
We assess our financial performance using a variety of measures including
alternative performance measures ("APMs"), as explained further on pages 15 to
17. In the headings and tables presented, these measures are indicated with an
asterisk: *.
Quilter highlights H1 2025 H1 2024 Change
Assets and flows - core business
AuMA* (£bn) 123.4 110.6 12%
Gross flows* (£bn) 9.4 7.4 27%
Net inflows* (£bn) 4.5 1.7 160%
Net inflows/opening AuMA* (annualised) 8% 3% 5 ppts
Assets and flows - reported
AuMA* (£bn) 126.3 113.8 11%
Gross flows* (£bn) 9.5 7.5 27%
Net inflows* (£bn) 4.3 1.5 182%
Net inflows/opening AuMA* (annualised) 7% 3% 4 ppts
Profit and loss
IFRS profit before tax attributable to shareholder returns (£m) 62 18 244%
IFRS profit after tax (£m) 46 13 254%
Adjusted profit before tax* (£m) 100 97 3%
Operating margin* 30% 29% 1 ppt
Revenue margin* (bps) 42 45 (3) bps
Adjusted diluted earnings per share* (pence) 5.4 5.2 4%
Interim Dividend per share (pence) 2.0 1.7 18%
Basic earnings per share (pence) 3.4 1.0 240%
Quilter plc results for the period ended 30 June 2025
Investor Relations
John-Paul Crutchley UK +44 7741 385251
Maheet Harry UK +44 777 9613940
Keilah Codd UK +44 7776 649681
Media
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Steven Levin, CEO, and Mark Satchel, CFO, will give a presentation via webcast
at 08:30am (BST) today, 6 August 2025. The presentation will be followed by a
Q&A session.
The presentation will be available to view live via the webcast or can be
listened to via a conference call facility. Details on how to join online or
via conference call can be found on our website: 2025 results and
presentations | Quilter plc
(https://plc.quilter.com/investor-relations/results-and-presentations/2025-results-and-presentations/)
Note: Neither the content of the Company's website nor the content of any
website accessible from hyperlinks on this announcement (or any other website)
is incorporated into, or forms part of, this announcement.
Disclaimer
This announcement may contain 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
global conflicts, economic political uncertainty, 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 presentation or any other forward-looking statements it may
make.
Chief Executive Officer's statement
Business performance
I am pleased with our performance during the first half of 2025. While UK and
European markets have delivered positive year-to-date returns, US Dollar
weakness meant US denominated assets were lower in Sterling terms.
Notwithstanding this, we have delivered:
1. a first half adjusted profit of £100 million (H1 2024: £97
million) representing an increase of 3% on 2024's strong base level;
2. an operating margin of 30% (H1 2024: 29%), despite lower interest
rates reducing investment income on shareholders' funds; and
3. strong flow momentum across the business with core net inflows up
160% to £4.5 billion. This represented 8% (annualised) of opening assets (H1
2024: £1.7 billion, 3% (annualised) of opening assets).
Our Affluent segment delivered strong core net inflows of 9% (annualised) of
opening assets (H1 2024: 5%). Our Platform flows maintained the strong
momentum from the second half of 2024 and continues to gain recognition from
external market observers, improved net promoter scores as well as winning
awards for service. First half Platform net inflows of £4.2 billion were up
92% on the first half of 2024 with this representing 10% (H1 2024: 6%) of
opening assets (annualised).
Our High Net Worth segment delivered an improvement in net inflows to 3%
(annualised) of opening assets (H1 2024: 1%). New gross flows were broadly
stable at £1.5 billion with an easing of outflows leading to much better
performance at the net level of £464 million (H1 2024: £107 million).
Adjusted profit before tax of £100 million (H1 2024: £97 million) represents
the Group's IFRS profit, adjusted for items that management consider to be
outside of normal operations or one-off in nature. The Group's IFRS profit
after tax was £46 million compared to £13 million in H1 2024. Principal
differences between adjusted profit and IFRS profit in the current period are
due to non-cash amortisation of intangible assets and business transformation
expenses.
In our preliminary results announcement on 5 March 2025, we recognised a
provision of £76 million to cover potential remediation outcomes associated
with the Skilled Person Review of ongoing advice by Appointed Representative
firms in the Quilter Financial Planning network. The Skilled Person report was
submitted to the FCA in the second quarter, and we have had initial
conversations with the FCA regarding the implementation of the potential
remediation programme. The provision of £76 million has since reduced to £70
million as a result of utilisation and discount unwind. The Group continues to
believe this sum remains appropriate.
Group adjusted diluted earnings per share was 5.4 pence, an increase of 4% (H1
2024: 5.2 pence). On an IFRS basis, we delivered basic earnings per share of
3.4 pence per share versus 1.0 pence per share for H1 2024.
The Board declared an Interim Dividend of 2.0 pence per share, representing
one third of the total 2024 dividend with this equivalent to a pay-out ratio
of 59%. Once we have confirmed the implementation of the Ongoing Advice
remediation programme with the FCA, the Group intends to undertake a review of
our capital needs, foreseeable requirements and expected future cash and
capital generation to consider whether the Group has excess capital and
whether the current distribution strategy remains appropriate. We anticipate
updating on the outcome of this exercise with our preliminary results
announcement in March 2026.
Strategic positioning
Quilter is in great shape today and we believe Quilter is well placed to be a
winner from the changes reshaping our industry:
· First, we believe that the next few decades will witness a
significant intergenerational transfer in wealth as the "baby boomer"
generation passes assets to younger generations. With the complexity of UK
personal tax legislation continuing to increase, appropriate personalised
financial advice is needed to ensure this is undertaken as tax-efficiently as
possible. The announcement in the last budget that pensions would be brought
into inheritance tax from April 2027 has already driven up adviser-client
engagement as clients revisit their existing financial plans.
· Second, policymakers, regulators and individuals all recognise
the need for UK households to invest more to meet desired living standards in
retirement. While UK households are a nation of savers, bank deposits do not
generate real capital appreciation. We believe that appropriately structured,
well-diversified investment portfolios are the most appropriate pathway to
long-term wealth accumulation for British households. Quilter can provide this
at scale.
· Third, the Advice Guidance Boundary Review ("AGBR") which
introduces "Targeted Support" represents the most significant change to UK
retail financial services regulation since the Retail Distribution Review over
ten years ago. Over time, we expect that Targeted Support will allow a much
broader range of options to UK households who need help with financial
planning and will allow this to be provided in a manner that best suits their
requirements.
· Finally, we are encouraged by the sentiments expressed by the UK
Chancellor at her recent Mansion House speech. Clearly, the recognition from
policy-makers and regulators of the need to deliver more proportionate,
pro-growth regulation in the UK is positive both for investors in UK financial
services companies and for those of us across the industry who fundamentally
want to deliver good outcomes for our clients.
Reflecting these industry trends, Fundscape, an independent platform analysis
company, expects UK advised platform assets of c.£680 billion at end December
2024 to increase by around 70% by end 2029 in their base case. Convenience of
use and easy access to flexible transparent solutions will ensure that the
platform industry continues to be the natural custodian of wealth investments
accumulated by UK households. Moreover, platforms help advisers meet the
demands of Consumer Duty by allowing them to focus on the advice relationship,
while outsourcing investment management to managed portfolio solutions.
Quilter combines the UK's largest and fastest growing advised platform of
scale, with our well-performing and market-leading WealthSelect managed
portfolio proposition, which now has over £21 billion of Assets under
Management. This makes Quilter particularly capable to capitalise on these
trends. Our dual-distribution strategy ensures Quilter is well-placed to
deliver wealth solutions to UK households at an industrial scale, with this
built on the personal nature of individual adviser-client relationships that
are core to the industry's success.
We also see significant growth potential in our High Net Worth business.
Oliver Wyman, a leading consultancy, estimates that the High Net Worth market
in the UK will grow by around 50% by 2029. We believe delivering on that
potential will need an evolution of traditional DFM models towards more
differentiated propositions in order to allow them to serve a broader range of
wealthy clients.
My priorities
Looking ahead, our focus is on the following initiatives:
1. Building the advice business of tomorrow
We have around 1,450 Quilter RFP's across our network who wrote around £2.5
billion of new business in the first half of 2025, a broadly similar level to
2024. The investment we are making in our Advice Transformation Programme
("ATP") aims to materially improve their productivity through enhanced Client
Relationship Management systems with integrated support tools. ATP will allow
advisers to service a larger number of clients under a range of service and
charging models and will be implemented over the next couple of years.
Our Adviser Academy continues to deliver increasing numbers of advisers, with
63 graduating in the first half of 2025. These graduates, together with new
firm joiners have contributed to a net increase of 14 advisers within our
network since year-end. Our medium-term goal remains for academy graduates to
broadly offset natural attrition from retirements with growth coming from new
advisers and firms joining the network. Our Quilter Partners proposition is
also expected to be a source of adviser growth and now covers ten hub firms
which combine investment and Platform alignment with the entrepreneurial drive
and focus of owner-operated businesses.
2. Broadening distribution channels
As a result of the conclusions of the AGBR, we expect the financial support
options for UK consumers to increase significantly. The FCA indicated that
they are likely to be comfortable with Targeted Support being provided at no
charge to ensure maximum take-up, with the costs of providing this met through
product cross subsidisation (subject to this being undertaken in a Customer
Duty compliant manner). Such an approach would favour integrated firms, like
Quilter, who can use scale efficiencies in platform and investment solutions
to deliver a compelling targeted support proposition for clients. The
acquisition of NuWealth last year allows us to accelerate development of a
targeted support proposition for self-directed investors who would like a
little help to build their financial wealth.
3. High Net Worth evolution
In June we announced Andy McGlone had decided he would step down as CEO of our
High Net Worth business later this year. I would like to thank Andy for all
his efforts building this business over the last few years. I am particularly
pleased by the successful integration of our investment and advice businesses
into a single legal entity which allows us to service clients more
effectively. Moving forward, I expect Andy's successor, John Goddard, to
continue to oversee the evolution of the business from being largely
investment proposition led towards being recognised as a leading integrated
wealth management business.
4. Enhancing the Quilter brand
We believe there is a significant opportunity to develop Quilter as a leading
UK retail financial services brand recognised as a trusted destination for
advice and investment services. Our sponsorship of the Quilter Nations Rugby
Series later this year is the first step in establishing that connection which
we look forward to building upon in the years ahead.
Outlook
Our results in the first half of 2025 have built upon the strong progress of
the last two years. Looking forward, we expect a broadly stable UK
macroeconomic environment, gradually reducing interest rates and a pick-up in
real wages supporting increased saving and investment by UK households. We are
approaching the end of our second Simplification programme. By end-June, this
had delivered £43 million of cost savings on a run-rate basis. The remainder
of the targeted £50 million will be delivered by end 2025. However, the brand
spend and business investment plans we announced alongside our preliminary
results earlier this year will lead to a step-up in second half costs, and we
expect that this will largely offset the higher revenue contribution from our
net flow momentum and positive markets. As a result, we currently anticipate
that second half adjusted profit will be broadly equivalent to the first half
level.
Longer-term, increased demand for financial advice and support will be driven
by three structural factors:
· increasing inter-generational transfer of wealth where
personalised financial advice can ensure this happens in a tax-efficient
manner;
· individuals needing to take personal responsibility for their
long-term financial security; and
· regulatory changes reshaping the advice landscape, with policy
makers recognising individuals need help to meet their financial goals.
This provides a significant opportunity, which we will meet through:
· supporting advisers with improved technology to enhance their
productivity; and
· building new advice and guidance propositions for clients who are
receptive to Targeted Support.
The fundamental growth characteristic that supports our business - the need to
save for retirement - has never been more important to both individuals and to
society than it is today. The strength of our dual-distribution model coupled
with the operating leverage in our Platform and Solutions business allows us
to provide personal wealth management services at scale, while our business
focus, investment solutions and client philosophy all support delivering good
client outcomes through long-term wealth accumulation. We look forward to the
future with confidence and remain focused on supporting advisers and our
clients to meet their needs while delivering strong outcomes for all our
stakeholders in the years ahead.
Steven Levin
Chief Executive Officer
Financial review
Review of financial performance
Overview
The Group delivered solid growth in the first half of 2025, with adjusted
profit before tax of £100 million, an increase of 3% on the prior period (H1
2024: £97 million). This was supported by higher net management fees driven
by increased average AuMA due to strong net inflows and positive markets, and
continued delivery of our Simplification programme. The Group's reported
closing AuMA was £126.3 billion, a 6% increase on the opening position (FY
2024: £119.4 billion). The AuMA increase of £6.9 billion is driven by net
inflows of £4.3 billion and supported by market movements, including currency
movements, of £2.6 billion.
Alternative Performance Measures ("APMs")
We assess our financial performance using a variety of measures including
APMs, as explained further on pages 15 to 17. In the headings and tables
presented, these measures are indicated with an asterisk: *.
Key financial highlights
Quilter highlights H1 2025 H1 2024
Assets and flows - core business
AuMA* (£bn) 123.4 110.6
Gross flows* (£bn) 9.4 7.4
Net inflows* (£bn) 4.5 1.7
Net inflows/opening AuMA* (annualised) 8% 3%
Productivity: Quilter channel gross sales per Quilter Adviser* (£m)(1) 3.3 3.2
(annualised)
Asset retention* (annualised) 92% 89%
Assets and flows - reported
AuMA* (£bn) 126.3 113.8
Gross flows* (£bn) 9.5 7.5
Net inflows* (£bn) 4.3 1.5
Net inflows/opening AuMA* (annualised) 7% 3%
Profit and loss
IFRS profit before tax attributable to shareholder returns (£m) 62 18
IFRS profit after tax (£m) 46 13
Adjusted profit before tax* (£m) 100 97
Operating margin* 30% 29%
Revenue margin* (bps) 42 45
Return on equity* (annualised) 10.5% 9.6%
Adjusted diluted earnings per share* (pence) 5.4 5.2
Interim Dividend per share (pence) 2.0 1.7
Basic earnings per share (pence) 3.4 1.0
Non-financial
Total Restricted Financial Planners ("RFPs") in both segments(2) 1,454 1,437
Discretionary Investment Managers in High Net Worth segment(2) 180 175
(1)Quilter channel gross sales per Quilter Adviser is a measure of the value
created by our Quilter distribution channel.
(2)Closing headcount as at 30 June.
In the core business, net inflows of £4.5 billion increased by 160% against
the prior period (H1 2024: £1.7 billion). This improvement reflected the
overall favourable macro environment, stronger investor confidence, and
enhanced effectiveness in our distribution and proposition strategies. Core
gross flows increased 27% to £9.4 billion, (H1 2024: £7.4 billion), driven
by higher activity of IFA channel flows onto the Platform. The increase
reflects growth in both the total advised platform market and our market share
among IFA firms. Productivity, representing Quilter channel annualised gross
sales per Quilter Adviser, increased by 3% to £3.3 million (H1 2024: £3.2
million).
Within the Affluent segment:
· Quilter channel: Gross flows of £2.1 billion were in line with
the prior period, whilst net inflows of £1.3 billion increased 25% (H1 2024:
£1.1 billion), demonstrating our continued strategic commitment to grow our
Advice business. Annualised net inflows as a percentage of opening AuMA for
the Quilter channel were 14% (H1 2024: 12%).
· IFA channel: Gross flows of £5.7 billion onto the Quilter
Platform increased by 49% (H1 2024: £3.8 billion). Net inflows of £2.9
billion were significantly higher than the prior period (H1 2024: £1.0
billion) reflecting both the breadth and strength of our proposition and
distribution, and an increased market share of new business as we continued to
win flows from competitors. Based on the latest Fundscape data (Q1 2025), the
Platform continues to maintain the leading share of gross and net flows
against our retail advised platform peers. Annualised net inflows as a
percentage of opening AuMA for the IFA channel onto the Platform were 9% (H1
2024: 3%).
· Funds via third-party platforms reported net outflows of £88
million, compared to £241 million of net outflows in the previous period.
Asset retention of 91% for the Affluent segment improved by 2 percentage
points from the prior period (H1 2024: 89%).
Within the High Net Worth segment, gross flows of £1.5 billion were in line
with the first half of 2024. Net inflows of £0.5 billion were meaningfully
ahead of the prior period (H1 2024: £0.1 billion), predominately driven by
net inflows in the IFA and direct channel during the first half of 2025 and
the loss of a large value low margin account in the prior period. Asset
retention of 93% for the High Net Worth segment was 4 percentage points ahead
of the previous period (H1 2024: 89%).
The Group's core business AuMA of £123.4 billion is 6% ahead of the opening
position (FY 2024: £116.3 billion) reflecting positive market movements of
£2.6 billion and net inflows of £4.5 billion. The Affluent core segment AuMA
increased by 7% to £95.0 billion (FY 2024: £88.5 billion), of which £32.0
billion is managed by Quilter, versus the opening position of £29.5 billion.
The High Net Worth segment AuM was £30.0 billion, up 2% from the opening
position of £29.5 billion, with all assets managed by Quilter.
In total, £61.7 billion, representing 50% of core business AuMA, is managed
by Quilter across the Group (FY 2024: £58.5 billion, 50%).
The Group's revenue margin of 42 bps was 3 bps lower than the prior period (H1
2024: 45 bps).
In the Affluent segment, the administered revenue margin was 23 bps, 2 bps
lower than the prior period (H1 2024: 25 bps). This is primarily the result of
the impact from our tiered pricing structure and is consistent with our
expectations. The managed revenue margin decreased by 2 bps to 35 bps (H1
2024: 37 bps). As anticipated, within our Managed Solutions the proportion of
total client assets invested in the Cirilium Active range, our highest revenue
bps contributor, remained in net outflow as advisers continued to favour
Managed Portfolio Services ("MPS") for their clients. Reflecting this ongoing
shift towards managed solutions on platforms, WealthSelect remains the largest
MPS offering in the industry and continues to grow with AuMA of £21.0 billion
as at 30 June 2025 (FY 2024: £18.4 billion).
The revenue margin in the High Net Worth segment decreased by 4 bps to 67 bps
(H1 2024: 71 bps), primarily due to a shift to MPS solutions and change in
asset mix.
Adjusted profit before tax increased by 3% to £100 million (H1 2024: £97
million). Net management fees of £257 million increased 5% (H1 2024: £245
million) primarily due to an increase in reported average AuMA compared to the
prior period of 11% to £122.1 billion (H1 2024: £110.0 billion), partially
offset by the reductions in net management fee margins largely reflecting the
changes in the High Net Worth and Affluent Solutions asset mix and lower
Platform margins in line with our guidance.
Interest revenue generated from client funds included within net management
fees were £14 million (H1 2024: £16 million) reflecting the reduction in
interest rates compared to the prior period. Other revenue of £48 million,
which mainly comprise our share of income from providing advice, was broadly
in line with the prior period (H1 2024: £47 million). Investment revenue,
predominantly interest income generated on shareholder cash and capital
resources of £32 million, decreased by £5 million (H1 2024: £37 million)
due to lower average interest rates in the first half of 2025 compared to the
prior period.
Operating expenses of £237 million increased by 2% on the prior period (H1
2024: £232 million) as a result of inflationary and National Insurance
increases, higher FSCS levies and planned business investment, partially
offset by Simplification cost savings. The Group operating margin improved by
1 percentage point to 30% (H1 2024: 29%).
The Group's IFRS profit after tax was £46 million compared to £13 million in
H1 2024. This primarily reflects variances in policyholder tax outcomes in the
prior period.
Adjusted diluted earnings per share increased 4% to 5.4 pence (H1 2024: 5.2
pence).
Total net revenue*
Total net revenue H1 2025 (£m) Affluent High Net Worth Head Office Quilter plc
Net management fee*(1) 158 99 - 257
Other revenue*(2) 38 10 - 48
Investment revenue*(2) 22 4 6 32
Total net revenue* 218 113 6 337
Total net revenue H1 2024 (£m) Affluent High Net Worth Head Office Quilter plc
Net management fee*(1) 147 98 - 245
Other revenue*(2) 37 10 - 47
Investment revenue*(2) 22 4 11 37
Total net revenue* 206 112 11 329
(1)Net management fee includes the interest earned on client holdings in
Quilter Cheviot and Quilter Investment Platform.
(2)Interest income and expense on intercompany loans has been reclassified
from Other revenue to Investment revenue, better reflecting the nature of the
revenue.
Total net revenue for the Affluent segment was £218 million, an increase of
6% from the prior period (H1 2024: £206 million). Net management fees were
£158 million, £11 million ahead of the prior period (H1 2024: £147
million). This reflects a 13% increase in average Affluent AuMA with revenue
margins reducing due to changes in the asset mix and the tiering impact on
Platform pricing. Within net management fees, £9 million (H1 2024: £10
million) relates to interest sharing arrangements on cash balances held on the
Platform.
Other revenue within the Affluent segment was £38 million (H1 2024: £37
million). This largely comprises our share of income from providing advice
within Quilter Financial Planning. Investment revenue of £22 million (H1
2024: £22 million) represents interest earned on shareholder capital held to
meet the regulatory capital requirements of the business.
Total net revenue of £113 million in the High Net Worth segment was £1
million higher than the prior period (H1 2024: £112 million). Net management
fees were £1 million ahead of the prior period at £99 million (H1 2024: £98
million) with higher average AuM, partially offset by changes to some of our
fee structures and the mix of assets. Net management fees include interest
margin earned on client cash balances of £5 million (H1 2024: £6 million).
Other revenue of £10 million, predominantly reflected revenue generated in
Quilter Cheviot Financial Planning, and was in line with the prior period (H1
2024: £10 million). Investment revenue, representing revenue earned on
regulatory capital to support the business, of £4 million was in line with
the prior period (H1 2024: £4 million).
Operating expenses*
Operating expenses increased by 2% to £237 million (H1 2024: £232 million).
This increase largely reflects the combination of planned business investment,
inflationary impacts including higher National Insurance costs and higher FSCS
levies, partially offset by continued sustainable cost savings through the
Simplification programme.
Operating expenses (£m) H1 2025 H1 2024
Operating expenses As a percentage of revenues Operating expenses As a percentage of revenues
Support staff costs 50 51
Operations 6 6
Technology 12 10
Property 13 14
Other base costs(1) 15 17
Sub-total base costs 96 29% 98 30%
Revenue-generating staff base costs 56 17% 54 16%
Variable staff compensation 39 11% 38 12%
Other variable costs(2) 31 9% 30 9%
Sub-total variable costs 126 37% 122 37%
Regulatory/Insurance costs 15 4% 12 4%
Operating expenses* 237 70% 232 71%
(1)Other base costs includes depreciation and amortisation, audit fees,
shareholder costs, listed Group costs and governance.
(2)Other variable costs includes FNZ costs, development spend and corporate
functions variable costs.
We announced at our 2023 half-year results a target to deliver £50 million of
annualised run rate savings from Phase II of the Simplification programme with
this anticipated to be delivered on a run-rate basis by the end of 2025. At 30
June 2025, the programme had delivered £43 million of these savings, on a
run-rate basis, largely through the continued rationalisation of the Group's
technology and property estate, IT and operations efficiencies from our
investment in Advice technology, and a reduction in support costs as we
continue to simplify our governance and internal administration processes.
These benefits were partially offset by the impact of inflation on our cost
base during the year. As a result, base costs have continued to reduce in
absolute terms. As a percentage of revenues, base costs reduced by 1
percentage point to 29% (H1 2024: 30%).
Revenue-generating staff base costs increased by 4% to £56 million (H1 2024:
£54 million) and remains at a broadly similar proportion of revenues as we
continue to invest in our client-facing people and proposition across our
business segments to drive growth.
Variable staff compensation of £39 million (H1 2024: £38 million) increased
by 3% due to National Insurance changes and improved business performance.
Other variable costs of £31 million (H1 2024: £30 million) reflects an
increase in Platform fees owing to the significant growth in Platform average
AuMA experienced over the past year.
Regulatory and insurance costs increased by 25% to £15 million (H1 2024: £12
million) largely reflecting the increases to the FSCS levy during the first
half of the year.
Taxation
The effective tax rate ("ETR") on adjusted profit before tax was 25.2% (H1
2024: 25.4%). The Group's ETR is broadly in line with the UK headline
corporation tax rate of 25% and there are no material movements for the year.
The Group's ETR is dependent on a number of factors, including tax rates on
profits in jurisdiction outside the UK and the value of non-deductible
expenses or non-taxable income. The Group's IFRS income tax expense was a
charge of £54 million for the period ended 30 June 2025, compared to a charge
of £64 million for the prior period. The income tax expense or credit can
vary significantly period-on-period as a result of market volatility and the
impact that market movements have on policyholder tax. The recognition of the
income received from policyholders to fund the policyholder tax liability
(which is included within the Group's IFRS revenue) has historically been
volatile due to timing differences between the recognition of policy
deductions and credits and the corresponding policyholder tax expense,
resulting in the need for significant adjustments to the adjusted profit to
remove these distortions. The Group made refinements to its unit pricing
policy during 2024 which, as expected, has reduced the volatility in these
timing differences. See note 5(b) to the condensed consolidated interim
financial statements.
Reconciliation of adjusted profit before tax* to IFRS result
Adjusted profit before tax represents the Group's IFRS result, adjusted for
specific items that management considers to be outside of the Group's normal
operations or one-off in nature, as detailed in note 5(a) in the condensed
consolidated interim financial statements. The exclusion of certain adjusting
items may result in adjusted profit before tax being materially higher or
lower than the IFRS profit or loss after tax.
Adjusted profit before tax does not provide a complete picture of the Group's
financial performance, which is disclosed in the IFRS consolidated statement
of comprehensive income but is instead intended to provide additional
comparability and understanding of the financial results.
Reconciliation of adjusted profit before tax to IFRS profit after tax (£m) H1 2025 H1 2024
Affluent 79 72
High Net Worth 24 25
Head Office (3) -
Adjusted profit before tax* 100 97
Adjusting items:
Impact of acquisition and disposal-related accounting (11) (19)
Business transformation costs (17) (12)
Skilled Person Review - (2)
Customer remediation exercise (1) -
Exchange rate movement (ZAR/GBP) - 1
Policyholder tax adjustments - (38)
Finance costs (9) (9)
Total adjusting items before tax (38) (79)
Profit before tax attributable to shareholder returns 62 18
Tax attributable to policyholder returns 38 59
Income tax expense (54) (64)
IFRS profit after tax 46 13
The impact of acquisition and disposal-related accounting costs of £11
million (H1 2024: £19 million) includes amortisation of acquired intangible
assets and acquired adviser schemes. During the first half of the year the
intangible asset related to the Group's original acquisition of Quilter
Cheviot became fully amortised, which has reduced the overall amortisation
charge.
Business transformation costs of £17 million were incurred in H1 2025 (H1
2024: £12 million), which predominately reflects the delivery of
Simplification initiatives. The implementation costs to deliver the remaining
£7 million of annualised run-rate savings for the programme are estimated to
be £24 million.
There were no further costs related to the Skilled Person Review in H1 2025.
The prior period costs included the estimated external cost and direct cost of
internal resources to support and perform the Skilled Person Review of
historical data and practices across the Quilter Financial Planning network of
Appointed Representative firms. This cost was excluded from adjusted profit as
management considered it to be outside of the Group's normal operations and
one-off in nature.
Customer remediation exercise costs of £1 million (H1 2024: £nil) represent
the unwind of the discount rate when calculating the present value of future
costs associated with the Customer remediation exercise provision. During H1
2025, £7 million of the provision has been utilised in relation to
administrative costs. As at 30 June 2025, the Customer remediation exercise
provision stood at £70 million (31 December 2024: £76 million). Further
details of the provision are provided in note 16 of the condensed consolidated
interim financial statements. The costs related to this exercise are excluded
from adjusted profit as management considers it to be outside of the Group's
normal operations and one-off in nature.
For H1 2025 foreign exchange movements on cash held in South African Rand in
preparation for payments of dividends to shareholders were £nil (H1 2024: £1
million income). Cash is converted to South African Rand upon announcement of
the dividend payments to provide an economic hedge for the Group. The foreign
exchange movements are fully offset by an equal amount taken directly to
retained earnings.
For H1 2025, the total amount of policyholder tax adjustments to adjusted
profit was £nil (H1 2024: £38 million credit). Historically, adjustments to
policyholder tax have been made to remove distortions due to the recognition
of the income received from policyholders to fund the policyholder tax
liability (which is included within the Group's income) varying in timing to
the recognition of the corresponding tax expense, creating volatility in the
Group's IFRS profit or loss before tax. During 2024, the Group made changes to
the unit pricing policy relating to policyholder tax charges which has reduced
the volatility in these accounting timing differences, and in turn, the value
of the policyholder tax adjustments in 2025.
Review of financial position
Capital and liquidity
Solvency II
The Group's solvency surplus is £873 million at 30 June 2025 (31 December
2024: £851 million), representing a solvency ratio of 214% (31 December 2024:
219%). The solvency information for the six months to 30 June 2025 contained
in this results disclosure has been prepared based on a pro forma basis and
has not been audited.
The Group's solvency capital position is stated after allowing for the impact
of the foreseeable dividend payment of £27 million (31 December 2024: £57
million).
At At
30 June 31 December
Group Solvency II capital (£m) 2025(1) 2024(2)
Own funds 1,640 1,566
Solvency capital requirement ("SCR") 767 715
Solvency II surplus 873 851
Solvency II coverage ratio 214% 219%
(1)Based on preliminary estimates and including the impact of year-to-date
profits.
(2)As reported in the Group Solvency and Financial Condition Report for the
year ended 31 December 2024.
The Group solvency ratio remains broadly in line with the position as at 31
December 2024.
The Group's own funds include the Quilter plc issued subordinated debt
security which qualifies as capital under the UK Solvency II rules. The
composition of own funds by tier is presented in the table below.
At At
30 June 31 December
Group own funds (£m) 2025 2024
Tier 1(1) 1,437 1,366
Tier 2(2) 203 200
Total Group Solvency II own funds 1,640 1,566
(1)All Tier 1 capital is unrestricted for tiering purposes.
(2)Comprises a UK Solvency II compliant subordinated debt security in the form
of a Tier 2 bond, which was issued at £200 million in January 2023.
The Group SCR is covered by Tier 1 capital, which represents 187% of the Group
SCR of £767 million. Tier 2 capital represents 23% of the Group solvency
surplus.
Interim Dividend
The Quilter Board declared an Interim Dividend for 2025 of 2.0 pence per share
at a total cost of £27 million. The Interim Dividend will be paid on 22
September 2025 to shareholders on the UK and South African share registers on
29 August 2025. For shareholders on our South African share register an
Interim Dividend of 47.71146 South African cents per share will be paid on 22
September 2025, using an exchange rate of 23.85573.
Holding company cash
The holding company cash statement includes cash flows generated by the three
main holding companies within the business: Quilter plc, Quilter Holdings
Limited and Quilter UK Holding Limited. The flows associated with these
companies will differ markedly from those disclosed in the statutory statement
of cash flows, which comprises flows from the entire Quilter plc Group
including policyholder movements.
Holding company cash (£m) H1 2025 FY 2024
Opening cash at holding companies at 1 January 462 349
Dividends paid (57) (73)
Net capital movements (57) (73)
Head Office costs and Business transformation funding (16) (34)
Net interest received 4 18
Finance costs (9) (17)
Net operational movements (21) (33)
Cash remittances from subsidiaries 124 325
Capital contributions, loan repayments and investments (127) (102)
Other net movements - (4)
Internal capital and strategic investments (3) 219
Closing cash at holding companies at the end of the period 1 381 462
(( 1 ))The total holding company cash figure excludes certain amounts
earmarked to cover cash efficiency loans due to other Group companies on
demand including amounts relating to customer remediation.
Net capital movements
Net capital movements in the period totalled an outflow of £57 million, which
relates exclusively to dividend payments made to shareholders.
Net operational movements
Net operational movements were an outflow of £21 million for the period,
which includes £16 million of corporate and transformation costs, finance
costs of £9 million relating to coupon payments on the Tier 2 bonds and
non-utilisation fees for the revolving credit facility, and £4 million of net
interest income received on money market funds, Group loans and cash holdings.
Internal capital and strategic investments
The net outflow of £3 million is principally due to £124 million of cash
remittances from subsidiaries, offset by £127 million of capital
contributions to cover the potential customer remediation exercise across the
Quilter Financial Planning network of Appointed Representative firms, support
business operational activities and further investment in the underlying
business through acquisitions made. Capital contributions also include
obligations to the Employee Benefit Trust of £19 million (FY 2024: £12
million) to fund current and anticipated share based payment awards.
Shareholder information - Interim Dividend
The Quilter Board has declared an Interim Dividend of 2.0 pence per share. The
2025 Interim Dividend will be paid on Monday 22 September 2025 to shareholders
on the UK and South African share registers on Friday 29 August 2025 (the
"Record Date").
Dividend Timetable
Dividend announcement in pounds sterling with South Africa ZAR equivalent Wednesday 6 August 2025
Last day to trade cum dividend in South Africa Tuesday 26 August 2025
Shares trade ex-dividend in South Africa Wednesday 27 August 2025
Shares trade ex-dividend in the UK Thursday 28 August 2025
Record Date in the UK and South Africa Friday 29 August 2025
Interim Dividend Payment Date Monday 22 September 2025
From the opening of trading on Wednesday 6 August 2025 until the close of
business on Friday 29 August 2025, no transfers between the London and
Johannesburg registers will be permitted. Share certificates for shareholders
on the South African register may not be dematerialised or rematerialised
between Wednesday 27 August 2025 and Friday 29 August 2025, both dates
inclusive.
Additional information
For shareholders on our South African share register, an Interim Dividend of
47.71146 South African cents per share will be paid on Monday 22 September
2025, based on an exchange rate of 23.85573. Dividend Tax will be withheld at
the rate of 20% from the amount of the gross dividend of 47.71146 South
African cents per share paid to South African shareholders unless a
shareholder qualifies for exemption. After the Dividend Tax has been withheld,
the net Interim Dividend will be 38.16917 South African cents per share. The
Company had a total of 1,404,105,498 shares in issue at today's date.
If you are uncertain as to the tax treatment of any dividends, you should
consult your own tax adviser.
Supplementary information
Alternative Performance Measures ("APMs")
We assess our financial performance using a variety of measures including
APMs, as explained further on pages 15 to 17. These measures are indicated
with an asterisk: *.
For the period ended 30 June 2025
1. Key financial data
2025 YTD gross flows, net flows & AuMA (£bn), unaudited AuMA Gross Net AuMA Of which managed by Quilter
flows
as at
(£m) flows as at 30 AuM as at
31 December
June
30 June
(£m)
2024 2025 2025
AFFLUENT SEGMENT
Quilter channel(1) 19.1 2,073 1,323 20.2 16.3
IFA channel on Quilter Investment Platform 67.5 5,741 2,888 72.7 13.6
Funds via third-party platform 1.9 250 (88) 2.1 2.1
Total Affluent segment core business 88.5 8,064 4,123 95.0 32.0
HIGH NET WORTH SEGMENT
Quilter channel 3.6 391 300 3.9 3.9
IFA channel incl. Direct 25.9 1,142 164 26.1 26.1
Total High Net Worth segment 29.5 1,533 464 30.0 30.0
Inter-Segment Dual Assets(2) (1.7) (157) (81) (1.6) (0.3)
Quilter plc core business 116.3 9,440 4,506 123.4 61.7
Non-core 3.1 43 (183) 2.9 1.7
Quilter plc reported 119.4 9,483 4,323 126.3 63.4
Affluent AuMA breakdown (incl. Non-core):
Affluent administered only 60.2 5,181 2,953 64.2
Affluent managed and administered 25.2 2,473 1,288 27.8
Quilter Platform Sub-Total(3) 85.4 7,654 4,241 92.0
Affluent external platform 6.2 453 (301) 5.9
Affluent Total (Including Non-core) 91.6 8,107 3,940 97.9
(1)Quilter channel Platform discrete gross flows and net flows were £1,910
million and £1,408 million respectively, with closing AuMA of £18.1 billion.
(2)Inter-segment dual assets reflect funds managed by Quilter Cheviot and
administered by Quilter Investors and the Quilter Cheviot managed portfolio
service solutions available to advisers on the Quilter Investment Platform.
This is excluded from total AuMA to ensure no double count takes place.
(3)The Quilter Platform includes £3 million of gross flows, £55 million of
net outflows and £1.2 billion of closing AuA related to non-core assets.
2024 YTD gross flows, net flows & AuMA (£bn), unaudited AuMA Gross Net AuMA Of which managed by Quilter
flows
as at
(£m) flows as at 30 June AuM as at
31 December
30 June
(£m) 2024
2023 2024
AFFLUENT SEGMENT
Quilter channel(1) 17.2 2,053 1,056 17.9 14.0
IFA channel on Quilter Investment Platform 58.7 3,846 964 63.6 11.8
Funds via third-party platform 1.6 204 (241) 1.9 1.9
Total Affluent segment core business 77.5 6,103 1,779 83.4 27.7
HIGH NET WORTH SEGMENT
Quilter channel 2.9 386 307 3.3 3.3
IFA channel incl. Direct 24.1 1,146 (200) 25.4 25.4
Total High Net Worth segment 27.0 1,532 107 28.7 28.7
Inter-Segment Dual Assets(2) (1.1) (221) (153) (1.5) (0.5)
Quilter plc core business 103.4 7,414 1,733 110.6 55.9
Non-core 3.3 38 (202) 3.2 2.0
Quilter plc reported 106.7 7,452 1,531 113.8 57.9
Affluent AuMA breakdown (incl. Non-core):
Affluent administered only 53.2 3,441 1,115 56.9
Affluent managed and administered 20.6 2,190 1,097 23.1
Quilter Platform Sub-Total(3) 73.8 5,631 2,212 80.0
Affluent external platform 7.0 510 (635) 6.6
Affluent Total (Including Non-core) 80.8 6,141 1,577 86.6
(1)Quilter channel Platform discrete gross flows and net flows were £1,777
million and £1,304 million respectively, with closing AuMA of £15.2 billion.
(2)Inter-segment dual assets reflect funds managed by Quilter Cheviot and
administered by Quilter Investors and the Quilter Cheviot managed portfolio
service solutions available to advisers on the Quilter Investment Platform.
This is excluded from total AuMA to ensure no double count takes place.
(3)The Quilter Platform includes £8 million of gross flows, £56 million of
net outflows and £1.2 billion of closing AuA related to non-core assets.
Estimated asset allocation (%) H1 2025 FY 2024
Fund profile by investment type, unaudited Total client AuMA Total client AuMA
Fixed interest 25% 25%
Equities 65% 65%
Cash 3% 4%
Property and alternatives 7% 6%
Total 100% 100%
1. Affluent
The following table presents certain key financial metrics utilised by
management with respect to the business units of the Affluent segment, for the
periods indicated.
Key financial highlights H1 2025 H1 2024 % change
Affluent Administered
Net management fees (£m)* 102 94 9%
Other revenue (£m)* 2 1 100%
Investment revenue (£m)* 16 17 (6%)
Total net revenue (£m)* 120 112 7%
Net flows (£m)* 4,241 2,212 92%
Closing AuMA (£bn)* 92.0 80.0 15%
Average AuMA (£bn)* 88.3 76.7 15%
Revenue margin (bps)* 23 25 (2) bps
Asset retention (%)* (annualised) 92% 91% 1 ppt
Affluent Managed
Net management fees (£m)* 56 53 6%
Other revenue (£m)* - - -
Investment revenue (£m)* 3 2 50%
Total net revenue (£m)* 59 55 7%
Net flows (£m)* 987 462 114%
Closing AuM (£bn)* 33.7 29.7 13%
Average AuM (£bn)* 32.4 28.6 13%
Revenue margin (bps)* 35 37 (2) bps
Asset retention (%)*(annualised) 88% 84% 4 ppts
Advice (Quilter Financial Planning)
Net management fees (£m)* - - -
Other revenue (£m)* 36 36 -
Investment revenue (£m)* 3 3 -
Total net revenue (£m)* 39 39 -
RFPs (number) 1,390 1,369 2%
2. High Net Worth
The following table presents certain key financial metrics utilised by
management with respect to the business units of the High Net Worth segment,
for the periods indicated.
Key financial highlights H1 2025 H1 2024 % change
Quilter Cheviot
Net management fees (£m)* 99 98 1%
Other revenue (£m)* - - -
Investment revenue (£m)* 4 4 -
Total net revenue (£m)* 103 102 1%
Net flows (£m)* 464 107 334%
Closing AuM (£bn)* 30.0 28.7 5%
Average AuM (£bn)* 29.5 27.7 6%
Revenue margin (bps)* 67 71 (4) bps
Asset retention (%)* (annualised) 93% 89% 4 ppts
Discretionary Investment Managers (number) 180 175 3%
Advice (Quilter Cheviot Financial Planning)
Net management fees (£m)* - - -
Other revenue (£m)* 10 10 -
Investment revenue (£m)* - - -
Total net revenue (£m)* 10 10 -
RFPs (number) 64 68 (6%)
Financial performance by segment
The following table presents a breakdown of financial performance by segment
and Quilter plc for the periods indicated.
Affluent High Net Worth Head Office Quilter plc
Financial performance
H1 2025 (£m)
Net management fee*(1) 158 99 - 257
Other revenue*(2) 38 10 - 48
Investment revenue*(2) 22 4 6 32
Total net revenue* 218 113 6 337
Operating expenses* (139) (89) (9) (237)
Adjusted profit before tax* 79 24 (3) 100
Tax (25)
Adjusted profit after tax* 75
Operating margin (%)* 36% 21% 30%
Revenue margin (bps)* 34 67 42
Affluent High Net Worth Head Office Quilter plc
Financial performance
H1 2024 (£m)
Net management fee*(1) 147 98 - 245
Other revenue*(2) 37 10 - 47
Investment revenue*(2) 22 4 11 37
Total net revenue* 206 112 11 329
Operating expenses* (134) (87) (11) (232)
Adjusted profit before tax* 72 25 - 97
Tax (25)
Adjusted profit after tax* 72
Operating margin (%)* 35% 22% 29%
Revenue margin (bps)* 35 71 45
(1)Net management fee includes the interest earned on client holdings in
Quilter Cheviot and Quilter Investment Platform.
(2)Interest income and expense on intercompany loans has been reclassified
from Other revenue to Investment revenue, better reflecting the nature of the
revenue.
Alternative Performance Measures
We assess our financial performance using a variety of alternative performance
measures ("APMs"). APMs are not defined under IFRS, but we use them to provide
further insight into the financial performance, financial position and cash
flows of the Group and the way it is managed.
APMs should be read together with the Group's condensed consolidated interim
financial statements, which include the Group's statement of comprehensive
income, statement of financial position and statement of cash flows, which are
presented on pages 21 to 24.
Further details of APMs used by the Group in its Financial review are provided
below.
APM Definition
Adjusted profit before tax Adjusted profit before tax represents the Group's IFRS profit, adjusted for
specific items that management consider to be outside of the Group's normal
operations or one-off in nature, as detailed in note 5(a) in the condensed
consolidated interim financial statements. The exclusion of certain adjusting
items may result in adjusted profit before tax being materially higher or
lower than the IFRS profit after tax.
Adjusted profit before tax does not provide a complete picture of the Group's
financial performance, which is disclosed in the IFRS consolidated statement
of comprehensive income, but is instead intended to provide additional
comparability and understanding of the financial results.
A detailed reconciliation of the adjusted profit before tax metrics presented,
and how these reconcile to IFRS, is provided on pages 7 and 8 of the Financial
review. Adjusted profit before tax is referred to throughout the Chief
Executive Officer's statement and Financial review, with comparison to the
prior period explained on page 6.
A reconciliation from each line of the Group's IFRS income and expenses to
adjusted profit before tax is provided in note 5(c) in the condensed
consolidated interim financial statements.
Adjusted profit after tax Adjusted profit after tax represents the post-tax equivalent of the adjusted
profit before tax measure, as defined above.
Revenue margin (bps) Revenue margin represents net management fees (annualised), divided by average
AuMA. Management use this APM as it represents the Group's ability to earn
revenue from AuMA.
Revenue margin by segment and for the Group is explained on page 6 of the
Financial review.
Operating margin Operating margin represents adjusted profit before tax divided by total net
revenue.
Management use this APM as this is an efficiency measure that reflects the
percentage of total net revenue that becomes adjusted profit before tax.
Operating margin is referred to in the Chief Executive Officer's statement and
Financial review, with comparison to the prior period explained in the
adjusted profit section on page 6.
Gross flows Gross flows are the gross client cash inflows received from customers during
the period and represent our ability to increase AuMA and revenue. Gross flows
are referred to in the Financial review on pages 5 to 6 and disclosed by
segment in the supplementary information on pages 11 to 12.
Net flows Net flows are the difference between money received from and returned to
customers during the relevant period for the Group or for the business
indicated.
This measure is a lead indicator of total net revenue. Net flows is referred
to throughout this document, with a separate section in the Financial review
on pages 5 to 6 and is presented by business and segment in the supplementary
information on pages 11 to 12.
Assets under Management and Administration ("AuMA") AuMA represents the total market value of all financial assets managed and
administered on behalf of customers.
AuMA is referred to throughout this document, with a separate section in the
Financial review on page 5 and is presented by business and segment in the
supplementary information on pages 11 to 12.
Non-core AuMA Non-core AuMA and associated gross and net flows represents assets managed on
behalf of businesses we have sold together with some legacy funds which are in
run-off and remain in outflow.
Average AuMA Average AuMA represents the average total market value of all financial assets
managed and administered on behalf of customers. Average AuMA is calculated
using a 7-point average (half year) and 13-point average (full year) of
monthly closing AuMA.
Total net revenue Total net revenue represents revenue earned from net management fees,
investment revenue and other revenue listed below and is a key input into the
Group's operating margin.
Further information on total net revenue is provided on pages 6 to 7 of the
Financial review and note 5(c) in the condensed consolidated interim financial
statements.
Net management fees Net management fees consist of revenue generated from AuMA, fixed fee revenues
including charges for policyholder tax contributions, interest earned on
client holdings, less trail commissions payable. Net management fees are
presented net of trail commission payable as trail commission is a variable
cost directly linked to revenue, which is a treatment and presentation
commonly used across our industry. Net management fees are a part of total net
revenue and is a key input into the Group's operating margin.
Further information on net management fees is provided on pages 6 to 7 in the
Financial review and note 5(c) in the condensed consolidated interim financial
statements.
Other revenue Other revenue represents revenue not directly linked to AuMA (e.g. encashment
charges, closed book unit-linked policies, adviser initial fees and adviser
fees linked to AuMA in Quilter Financial Planning (recurring fees)). Other
revenue is a part of total net revenue, which is included in the calculation
of the Group's operating margin.
Further information on other revenue is provided on pages 6 to 7 in the
Financial review and note 5(c) in the condensed consolidated interim financial
statements.
Investment revenue Investment revenue includes interest on shareholder cash balances (including
cash at bank and money market funds).
Further information on investment revenue is provided on pages 6 to 7 in the
Financial review and note 5(c) in the condensed consolidated interim financial
statements.
Operating expenses Operating expenses represent the costs for the Group, which are incurred to
earn total net revenue and excludes the impact of specific items that
management considers to be outside of the Group's normal operations or one-off
in nature. Operating expenses are included in the calculation of adjusted
profit before tax and impact the Group's operating margin.
A reconciliation of operating expenses to the applicable IFRS line items is
included in note 5(c) to the condensed consolidated interim financial
statements, and the adjusting items excluded from operating expenses are
explained in note 5(b). Operating expenses are explained on page 7 of the
Financial review.
Asset retention The asset retention rate measures our ability to retain assets from delivering
good customer outcomes and investment performance. Asset retention reflects
the annualised gross outflows of the AuMA during the period as a percentage of
opening AuMA. Asset retention is calculated as: 1 - (annualised gross outflow
divided by opening AuMA).
Asset retention is provided for the Group's core business on page 5, and by
segment on page 6.
Net inflows/opening AuMA This measure is calculated as net flows annualised (as described above)
divided by opening AuMA presented as a percentage.
This metric is provided on page 5.
Quilter channel gross sales per Quilter Adviser This measure represents the value created by our Quilter distribution channel
and is an indicator of the success of our multi-channel business model. The
measure is calculated as gross flows (annualised) generated by the Quilter
channel through the Quilter Investment Platform, Quilter Investors or Quilter
Cheviot per average Restricted Financial Planner in both segments.
This metric is provided on page 5.
Return on Equity ("RoE") Return on equity calculates how many pounds of profit the Group generates with
each pound of shareholder equity. This measure is calculated as adjusted
profit after tax annualised divided by average equity. Equity is adjusted for
the impact of discontinued operations, if applicable.
Return on equity is provided on page 5.
Adjusted diluted earnings per share Adjusted diluted earnings per share is calculated as adjusted profit after tax
divided by the diluted weighted average number of shares.
A view of adjusted diluted earnings per share and the calculation of all EPS
metrics, is shown in note 8 to the condensed consolidated interim financial
statements.
Headline earnings per share The Group is required to calculate headline earnings per share in accordance
with the Johannesburg Stock Exchange Listing Requirements, determined by
reference to the South African Institute of Chartered Accountants' circular
1/2023 Headline Earnings. This is calculated on a basic and diluted basis. For
details of the calculation, refer to note 8 of the condensed consolidated
interim financial statements.
Dividend pay-out ratio The dividend pay-out ratio is an indicator of the total amount of dividends
paid to shareholders in relation to the Group's profits expressed as a
percentage. For the interim results, it is calculated as the Interim Dividend
(in £ millions), multiplied by three divided by the annualised post-tax,
post-interest adjusted profit (in £ millions).
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Announcement