Q4 sales surge lifts St James Place shares to five-year high

SHARES in wealth management group St James's Place Capital roared to five-year highs yesterday on a barnstorming fourth-quarter performance when sales leapt 59 per cent to £103 million.

It came as group chairman Mike Wilson said St James's was "very relaxed" about the timing of the replacement of chief executive Mark Lund, who quit abruptly earlier this month. Wilson said there was good management in place and trading was exceptionally buoyant "so we are not rushing it, we might go outside the industry".

He said that it might well be the second half of 2007 before an announcement of a successor to Lund was made.

"We have placed it in the hands of Andrew Garner of Garner International [a firm of headhunters]. I believe it was Andrew who found Andy Hornby for HBOS."

HBOS, the Bank of Scotland-to-Halifax banking group, owns 60 per cent of St James's, and Hornby replaced James Crosby at the parent company last summer.

The record Q4 sales performance helped drive St James's sales for the year up 58 per cent to 349m.

Wilson said this was obviously unsustainable in the medium term, but that the company was sticking to its medium-term target of 15 to 20 per cent sales growth.

"Most people think to be targeting 15-20 per cent growth for the longer term is fairly ambitious," he said.

Wilson said increasing numbers of the "mass affluent" wanted advice on anything from pensions to inheritance tax and business had blossomed with the freeing up of the rules surrounding pensions - known as A-Day - last year.

"People have been sitting on cash for some time, from three years ago, and now seem more optimistic and confident about going into the stock market for the longer-term," he said. Wilson added: "People were particularly surprised at the strong Q4 because it followed on a very strong Q4 in 2005, when we saw sales growth of 39 per cent."

Following publication of the results, St James's shares hit a five-year high of 451p, having risen 60 per cent in 2006. The stock later closed down 0.25p at 436p on profit-taking.

As with the sales growth, Wilson said it was obviously unsustainable for the share price to continue to grow at this sort of rate.

"A lot of it [the performance] is factored into the share price already," he said.

St James's said it had 1,157 partners at the end of the year, an underlying rise of about 6 per cent.

New business sales of pensions leapt 123 per cent in the fourth quarter and investment sales grew 36 per cent, but protection sales fell 12 per cent.