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Home / News / Weekly outlook: Quilter reveals H1 progress amid takeover rumours

Key events for UK wealth managers for the week starting 8 August

-First-half results from Clarkson and Pagegroup

-In Europe, quarterly results from Siemens Energy

-In the US, quarterly results from AIG, Barrick Gold and Palantir

-First-half results from Legal & General, Abrdn, InterContinental Hotels, IWG and H&T

Taking a page from M&G and Man Group, Abrdn announced it would return £300m to shareholders by buying back its own shares, a major shift from chief executive Stephen Bird’s largely acquisitive strategy.

As part of his plan to whip the business back in shape, Bird is also reportedly looking to sell Abrdn’s £14bn private equity arm. This follows the sale of other non-core businesses, including its adviser platform Parmenion.

Under Bird’s watch, the company has streamlined its product range, shutting a number of straggling funds. In 2021, net outflows slowed to £6.2bn, an 80% decline from the £29bn that exited in 2020. But this was before markets went south.

Meanwhile, Legal & General is expected grow its revenues in the low double-digits and its dividends by 8% this year, said Steve Clayton, fund manager at HL Select.

“Legal & General is one of the market’s heavyweight dividend payers, paying out around £1.1bn to shareholders last year. So there will be more than a few investors interested to see what pace of increase the group will announce at the half year stage,” he added.

-Full year results from Baillie Gifford US Growth Trust

-UK retail sales data from British Retail Consortium

-US NFIB smaller companies survey

-In Europe, quarterly results from Continental

-In the US, quarterly results from Roblox and Warner Music

-First-half results from Quilter, Aviva, Prudential, Admiral, CLS and CML Microsystems

Investors will be paying even closer attention to Quilter’s interim figures, which come hot on the heels of renewed takeover rumours. Natwest and three other private equity companies are thought to be submitting bids for the UK wealth manager in a deal.

Quilter’s shares shot up over 15% on the back of the report, but it is trading nearly a third lower compared to the start of the year. It has already seen assets under management slump 4% to £107.2bn in the first quarter.

Since spinning off from its parent Old Mutual, Quilter has been battling rising costs, chiefly related to migrating to a new platform, prompting the firm to axe hundreds of jobs.

Goldman Sachs said it is only now, post-re-platforming and the sale of its life back book and Quilter International, that Quilter has a similar business to its peers like St James’s Place, focusing purely on UK wealth management. However, it maintained its ‘neutral’ rating on the stock on the basis this business model “has yet to be tested” and its ambitious 2025 targets “appear optimistic in the current challenging market environment”.

Aviva chief executive Amanda Blanc has been under pressure to make even deeper cost cuts and sweeten returns for investors thanks to pressure from activist investor Cevian Capital. It is looking to bring controllable costs down by £400m between 2018 and 2023, though Cevian is pressing for a £500m reduction.

So far, it has returned £4.8bn to shareholders via a £1bn share buyback and B share scheme and raised £7.5bn from jettisoning a large chunk of its international businesses, with Blanc bringing the focus back to its British, Irish and Canadian operations, as well as Aviva Investors.

“Investors will therefore look for an update on this strategic plan, as well as an update on the £385m purchase of Succession Wealth, the UK wealth management and financial planning business,” said AJ Bell investment director Russ Mould and financial analyst Danni Hewson.

-Trading statements from TUI and S&U

-In Japan, quarterly results from Honda Motor

-In Europe, quarterly results from Vestas Wind Systems and E.ON

-In the US, quarterly results from Walt Disney

-First-half results from Antofagasta, Entain, Spirax-Sarco Engineering, M&G, OSB, Derwent London, Coca-Cola HBC and Inspecs

-Chinese retail sales, industrial production and fixed asset investment growth data

-US unemployment claims and mortgage delinquencies

Weekly unemployment claims last came in at 256,000, which Mould and Hewson note is “miles and miles and miles below the dark, pandemic-ridden days of spring 2020 and nothing like the highs seen during the recessions of 1990-1991, 2000-2001 or 2007-09”. But since bottoming out in March, they are up 50%.

Mould and Hewson said: “The overall numbers are still low, but the trend is not an encouraging one, given the first- and second-quarter GDP numbers. Maybe the US economy really is slowing down, which may be why the Biden administration will be relieved to finally get the $280bn Chips Act and $369bn Inflation Reduction Act passed – although how more stimulus can be expected to lower inflation is an interesting debate.”

Another stat to watch is the mortgage delinquencies. Though only 2.13% households were behind on their mortgage payments in Q1, the lowest since 2006, as US house prices hit record highs, Fed tightening pushes mortgage rates up and food and fuel bills continue climbing, this figure could start to creep up, Mould and Hewson said.

-US producer price (factory gate) inflation

-In Europe, quarterly results from Deutsche Telekom, Siemens, Hapag-Lloyd, Ørsted and Daimler Truck

-In the US, quarterly results from Illumina and Rivian

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