Quilter, a UK-based wealth management business, has released its preliminary financial results for 2022.

Faced with a difficult year, Quilter's assets under management and administration fell by 11 per cent at the end of December 2022, compared with 2021, reaching £99.6 billion ($118 billion), principally due to adverse market movements of £14 billion.

Revenues were broadly stable, with the reduction limited to 2 per cent to £606 million, largely supported by net interest income on corporate cash balances coupled with strong expense discipline delivering a reduction in costs, the UK firm said in a statement. It reduced operating expenses by £8 million from 2021 levels to £472 million, despite the impact of much higher than usual inflation across its business.

Across its two segments, high net worth delivered revenue stability, despite lower markets supported by a higher contribution from net interest income reflecting higher UK interest rates.

Quilter said it delivered adjusted profit before tax of £134 million, compared with £138 million in 2021, and a stable operating margin of 22 per cent.

According to the wealth manager, good progress was also made on plans to deliver additional cost efficiencies and proposition enhancements. The board recommended a final dividend to investors of 3.3 pence per share versus 2.8 pence for 2021, bringing the recommended total dividend for the year to 4.5 pence per share, an increase of 13 per cent on the continuing business dividend for 2021 of 4.0 pence per share.

There was also a special capital return of £328 million to shareholders from the sale of Quilter International through a B share issue coupled with share consolidation, the firm continued. Its total share count declined by about 25 per cent since its listing in 2018.

In addition, there were adjusted diluted earnings per share from continuing operations of 7.9 pence, compared with 7.4 pence in 2021. Basic earnings per share from continuing operations of 12.2 pence, compared with 1.4 pence in 2021 were also seen. There was a solvency II ratio of 230 per cent after payment of the recommended final dividend, compared with 275 per cent in December 2021.

The firm said its focus has been on strengthening the integration of ESG factors within its advice and investment processes and building on its active ownership work through its stewardship activity including exercising its voting rights and engaging with its underlying investments, be they companies or funds. 

Steven Levin, chief executive officer, said: “Since my appointment as chief executive in November 2022, I have been focusing on what more we need to do to realise Quilter’s potential. While we are well positioned across the UK wealth industry, I believe we can go further to improve performance. My plan is to build on our existing distribution strengths, enhance our client propositions and drive greater efficiency across our business to ensure we deliver faster growth and higher profitability.”

Given the changed market and economic environment since the firm’s Capital Markets Day in November 2021, Quilter now expects to reach a 25 per cent operating margin in 2025, rather than its previous target of 2023. Given its business mix, it believes that an appropriate operating margin for its business should be higher than 30 per cent and that remains the longer-term goal which they are focussed on.