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Investing.com -- Shares of Quilter (LON:QLT) climbed 6% today after the wealth management firm reported an earnings beat, with operating margins improving and costs rising less than expected.
The company’s revenue and segment revenues aligned with forecasts, but the lower-than-anticipated cost increases led to higher profits, despite a higher tax rate than previously assumed.
Quilter’s revenue margin saw a minor decline of 3 basis points to 44bps, but this was offset by a 2 percentage point increase in operating margin to 29%.
The firm had already disclosed its flow numbers, highlighting a significant improvement in the Affluent segment, which gained momentum through the year and entered 2025 on a strong note.
The company expects roughly 5% cost growth in 2025 before accounting for the simplification effects, along with an additional £4 million Financial Services Compensation Scheme (FSCS) levy and £5 million from changes to employers’ National Insurance, anticipating a 2025 cost base of around £500 million.
This figure is slightly above the current consensus of £497 million, indicating no major surprises for investors.
Additionally, Quilter has been proactive in addressing a skilled person review of ongoing charges initiated by the Financial Conduct Authority (FCA). The review, expected to be submitted in the second quarter, has so far revealed only a limited number of cases where advice fees were charged without a record of the service being provided.
Quilter has set aside a £76 million provision for customer remediation and related costs, which is significantly lower than the £170 million anticipated by Jefferies and the £150 million expected by the market.
Jefferies commented on the results, stating: "This is a solid set of results and the provision may be a mildly positive surprise."
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