Proactive Investors - St James 's Place shares have plummeted 30% to 431p, a 10-year low, after a £426 million provision following a "significant increase" in customer complaints led to a big swing from profit to loss.
It said the number of complaints escalated in the latter part of last year as service levels for ongoing clients were "less complete" in the years before it started using a new customer relationship management (CRM) system in 2021.
The FTSE 100-listed company was given a wigging by the Financial Conduct Authority back in the autumn, pushing the firm to align its fees with the new "consumer duty" regulations introduced in July, which aim to ensure companies act in the best interests of their customers.
In October, the company announced changes to its customer fee structure for investment bonds and pensions to make the fees more transparent and competitive, which it said would cost it £140-160 million, mostly in 2024.
With the combination of the complaints provision and new fee structure, future shareholders' returns will be limited, the company warned, with total annual shareholder distributions to be set at 50% of the full year underlying cash result, with the annual payout will be fixed at 18p per share for the next three years.
FTSE flops again
The FTSE 100 has continued its losing run, with disappointing blue-chip results weighing on the embattled index.
In early trades, the London benchmark slid 19 points or 0.25% lower to 7,663.77.
A 28% plunge for St. James’s Place PLC (LON:SJP) was a significant stone around its neck, as the UK's largest wealth manager slashed its dividend after swinging to a loss on the back of a £426 million provision for expected customer complaints.
The final dividend was chopped to 8p per share from 37.2p last time, and the payout for 2024, 2025 and 2026 was also set at a lower bar.
Elsewhere, the near-10% decline at Reckitt Benckiser (LON:RKT) would have normally grabbed the headlines, after the consumer products group's fourth-quarter performance fell short of expectations due to reduced sales of cold and flu products.
Housebuilder Taylor Wimpey (LON:TW) well 2.5% despite profits beating its earlier guidance. It said it expects house sale completions to fall further to 9,500-10,000 in 2024 from 10,356 last year.
"This is slightly below consensus, which currently expects 10,451 UK units, but appears prudent if the recent improvement in the market can hold," said analyst Edward Prest at Liberum.
Top of the risers was Vodafone Group PLC (LON:VOD), up almost 4% after notifying investors that a cash price of €8 billion for its Italian arm has been mooted in sale talks with Swisscom.
Wimpey beats, Reckitt misses
Results from housebuilder Taylor Wimpey PLC show profits plunged 48% last year, though this was not as bad as expected.
The FTSE 100-listed housebuilder reported a profit of £473.8 million before tax and exceptional items, beating the £470 million top end of guidance, but down from £908 million a year earlier.
This was on the back of total UK house completions falling to 10,438 from 13,773, while underlying build cost inflation in 2023 was around 8.5%.
For 2024 it expects to see a further decline in completed home sales, with profit margins continuing to be squeezed by lower house pricing and higher costs, but build cost inflation falling from 4% in work currently underway to 1% in new tenders.
Elsewhere, Reckitt Benckiser Group PLC reported a 1.2% fall in like-for-like sales in the fourth quarter, which was worse than City analysts expected.
Further modest growth is expected in 2024 as lower sales volumes combine with slower price rises.