Quilter plc - 2024 Half Year Results Part 1

Quilter PLC

07 August 2024

 

7 August 2024

Quilter plc interim results for the period ended 30 June 2024 

Quilter first half results deliver a 164% uplift in core net inflows to £1.7 billion, a 28% increase in adjusted profit to £97 million, and an operating margin of 29%

Steven Levin, Chief Executive Officer, said:

"We delivered a strong performance in the first half of 2024, combining record adjusted profit, consistently strong Quilter channel flows, significantly increased Platform IFA flows, and good progress on delivering our efficiency initiatives. Our work to transform Quilter is delivering tangible results, but we have more to do to reach the ambitious goals we have set for ourselves."

Highlights:

·     Total Assets under Management and Administration ("AuMA") of £113.8 billion at the end of June 2024, an increase of 7% on 31 December 2023 (£106.7 billion) driven by total reported net inflows of £1.5 billion (H1 2023: £0.2 billion) and positive market movements of £5.6 billion.

o  Core gross inflows of £7.4 billion increased by 35% (H1 2023: £5.5 billion), with the second quarter contribution higher than the first.

o  Core net inflows totalled £1.7 billion, an increase of 164% (H1 2023: £0.7 billion). This reflected continued good performance from the Quilter channel in both High Net Worth and Affluent segments and significantly improved IFA channel flows onto the Quilter Platform.

o  Net and gross Platform flows increased meaningfully in both quarters. Notably, second quarter Platform flows were ahead of the first, with significantly increased IFA channel flows contributing to much stronger net flows relative to the first half of 2023.

o  Non-core net outflows of £0.2 billion (H1 2023: £0.5 billion) relate to assets still managed on behalf of businesses sold.

·     Adjusted profit before tax increased by 28% to £97 million (H1 2023: £76 million), delivering an operating margin of 29%, an increase of five percentage points (H1 2023: 24%).

o  Total net revenue increased by 5% to £329 million (H1 2023: £312 million) with an increase in revenue generated on corporate cash balances partially offset by planned revenue margin attrition. This was coupled with strong expense discipline which delivered a third consecutive decline in first half costs. These reduced by £4 million to £232 million in the period, despite inflationary pressures.

·      Simplification phase II cost savings on track with £26 million of the £50 million target achieved on a run-rate basis at end June 2024.

·      Adjusted diluted earnings per share increased 21% to 5.2 pence (H1 2023: 4.3 pence).

·     IFRS profit after tax attributable to shareholders of £13 million (H1 2023: £5 million) with the period-on-period variance largely due to market valuation changes in the policyholder tax charge. Basic earnings per share of 1.0 pence (H1 2023: 0.4 pence).

·      Ongoing Advice Evidence review underway with Skilled Person appointed in June 2024. Expect to update by early 2025.

·      Interim Dividend of 1.7 pence per share, equal to one third of last year's Total Dividend (H1 2023: 1.5 pence per share).

·      Solvency II ratio of 268% after payment of the Interim Dividend (31 December 2023: 271%).

Key financial highlights

We assess our financial performance using a variety of measures including alternative performance measures ("APMs"), as explained further on pages 15 to 17. In the headings and tables presented, these measures are indicated with an asterisk: *.

Quilter highlights		H1 2024	H1 2023	Change
Assets and flows - core business
AuMA* (£bn)		110.6	98.3	13%
Gross flows* (£bn)		7.4	5.5	35%
Net inflows* (£bn)		1.7	0.7	164%
Net inflows/opening AuMA* (annualised)		3%	1%	2 ppts
Assets and flows - reported
AuMA* (£bn)		113.8	101.7	12%
Gross flows* (£bn)		7.5	5.5	34%
Net inflows* (£bn)		1.5	0.2	669%
Net inflows/opening AuMA* (annualised)		3%	0%	3 ppts
Profit and loss
IFRS profit before tax attributable to shareholder returns (£m)		18	7	157%
IFRS profit after tax (£m)		13	5	160%
Adjusted profit before tax* (£m)		97	76	28%
Operating margin*		29%	24%	5 ppts
Revenue margin* (bps)		45	48	(3) bps
Adjusted diluted earnings per share* (pence)		5.2	4.3	21%
Interim Dividend per share (pence)		1.7	1.5	13%
Basic earnings per share (pence)		1.0	0.4	150%

Quilter plc results for the period ended 30 June 2024

Investor Relations
John-Paul Crutchley	UK	[phone]
Keilah Codd	UK	[phone]
Media
Tim Skelton-Smith	UK	[phone]
Camarco
Geoffrey Pelham-Lane	UK	[phone]
Ben Woodford	UK	[phone]

Steven Levin, CEO, and Mark Satchel, CFO, will give a presentation via webcast at 08:30am (BST) today, 7 August 2024. The presentation will be followed by a Q&A session.

The presentation will be available to view live via the webcast or can be listened to via a conference call facility. Details on how to join online or via conference call can be found on our website: 2024 results and presentations | Quilter plc

Note: Neither the content of the Company's website nor the content of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

Disclaimer

This announcement may contain forward-looking statements with respect to certain Quilter plc's plans and its current goals and expectations relating to its future financial condition, performance and results.

By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Quilter plc's control including amongst other things, international and global economic and business conditions, the implications and economic impact of the conflicts in the Ukraine and the Middle East, economic political uncertainty, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing and impact of other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation and other regulations in the jurisdictions in which Quilter plc and its affiliates operate. As a result, Quilter plc's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Quilter plc's forward-looking statements.

Quilter plc undertakes no obligation to update the forward-looking statements contained in this announcement or any other forward-looking statements it may make.

Chief Executive Officer's statement

Business performance

I am pleased with our first half 2024 performance, which combined:

1.     record first half adjusted profit;

2.     higher Platform flows with good momentum maintained in the Quilter channel and very significant growth in the IFA channel; and

3.     excellent progress on efficiency initiatives.

With UK inflation easing, consumers' disposable income has improved, leading to early signs of incremental discretionary saving. We expect new business levels across the industry in 2024 to be higher than in 2023. Interest rates also remained supportive in the first half, sustaining the investment return generated on shareholder funds which, together with strong cost management, led to a 28% increase in first half adjusted profit to £97 million (H1 2023: £76 million). While expected lower interest rates in the second half will reduce investment income, we would also expect lower rates to support market levels and increase client focus on long-term saving, both of which are supportive for new business flows and revenue growth.

Since 2021, we have reduced first half costs by £16 million to £232 million (H1 2023: £236 million) through consecutive annual declines, despite an inflationary backdrop. Over the three-year period, this has led to an increase in the operating margin of 11 percentage points to 29% (H1 2023: 24%).

Affluent segment revenues increased 6% to £206 million (H1 2023: £195 million) reflecting higher average AuMA and net inflows, partially offset by planned lower revenue margins from repricing of both the Platform and Cirilium investment range last year. Strong cost management combined with a lower-than-expected FSCS levy which led to a 33% increase in adjusted profit to £72 million for the half year (H1 2023: £54 million).  

High Net Worth segment revenues increased 4% to £112 million (H1 2023: £108 million) reflecting higher average AuMA on a slightly lower revenue margin. Operating expenses modestly increased to £87 million (H1 2023: £85 million) reflecting planned business investment. The segment contribution to adjusted profit before tax was 9% higher at £25 million (H1 2023: £23 million).

Adjusted profit before tax of £97 million represents the Group's IFRS profit, adjusted for specific items that management consider to be outside of normal operations or one-off in nature. The Group's IFRS profit after tax was £13 million compared to £5 million in H1 2023. Principal differences between adjusted profit and IFRS profit are due to non-cash amortisation of intangible assets, business transformation expenses and the impact of policyholder tax positions on the Group's results.

In the preliminary results announcement on 6 March 2024, the Group committed to undertake a review of historical data and practices across the Appointed Representative firms ("AR Firms") in the Quilter Financial Planning network ("QFP network"). The purpose of this review is to determine, based on the available evidence, if the AR Firms in the QFP network have met their ongoing servicing obligations to customers and, if not, remediate customers to the extent appropriate. Following discussion with the FCA, this review is being conducted by a Skilled Person, and the Skilled Person was appointed in June 2024. The Group expects to provide an update on the Skilled Person review by early 2025.

Group adjusted diluted earnings per share were 5.2 pence, an increase of 21% (H1 2023: 4.3 pence). On an IFRS basis, we delivered basic earnings per share of 1.0 pence per share versus 0.4 pence per share for H1 2023.

The Board has set the Interim Dividend at one third of last year's Total Dividend, equivalent to 1.7 pence per share, and will decide on the appropriate level for the Final Dividend in early 2025. That decision will reflect underlying business performance, the operating environment, the strength of our balance sheet together with any potential costs and remediation activity relating to the Ongoing Advice Evidence review.

Flows and investment performance

·      Quilter channel: Our High Net Worth segment delivered a 45% increase in gross flows to £386 million (H1 2023: £266 million) and our Affluent segment increased gross flows by 16% to £2.1 billion (H1 2023: £1.8 billion), with this leading to higher net flows in the half. Annualised net flows as a percentage of opening balances in the Quilter channel were 21% and 12% for the High Net Worth and Affluent segments respectively.

·      IFA channel: New business volumes in both segments were significantly higher than the prior period, increasing by 30% to £1,146 million (H1 2023: £884 million) for the High Net Worth segment and increasing by 50% to £3.8 billion (H1 2023: £2.6 billion) in the Affluent segment reflecting market share improvement. Elevated outflows continued in the High Net Worth segment, with the notable loss of one particular large low margin fund mandate in the second quarter. As a result, net inflows in the High Net Worth segment were muted in the half.

·      Within Affluent, our Platform momentum continues to accelerate. First quarter Platform net flows of £1,048 million were the highest since early 2018 and we surpassed this level, reaching £1,164 million, in the second quarter. Notably, both gross and net flows from the IFA channel were higher in the second quarter than the first. Our overall market share of new business continues to steadily improve and continues to remain above our share of stock. I am also pleased to report that the proportion of assets on our Platform that are both administered and managed by us continues to increase with our pension and investment bond retirement propositions the primary product destination for net flows.

In Affluent, our Multi-Asset strategy funds are well diversified and therefore tend to lag in markets where performance is driven by narrow breadth from relatively few stocks. As a result, Quilter Investors investment performance over the last 6 months has lagged due to the strong performance of the "Magnificent 7" stocks in the US equity market where the funds remain underweight. Notwithstanding this, our WealthSelect managed portfolio range continued to deliver solid performance with the Cirilium fund range delivering a weaker out-turn.

High Net Worth investment performance has been strong, outperforming the ARC PCI Steady Growth and Equity Risk benchmark indices over 1-, 3- and 5-years (latest figures to end March). Core Discretionary and Managed Portfolio Solutions have all outperformed their respective PIMFA benchmarks over the 12 months to end June, with MPS also outperforming the respective IA sectors.

Strategic Transformation

Our change programmes remain on track and are underpinned at a Group level by our Simplification programme. Taking each in turn:

1.     High Net Worth

Our Quilter Cheviot branded advice business continued to deliver strong flows into our Discretionary and Managed Portfolio Solutions. Our application to extend permissions to provide advice from the Quilter Cheviot legal entity has progressed well and an approval date in September 2024 has been agreed with the FCA. This will allow us to bring our advice and investment management teams together in a single regulated entity. It is our intention to undertake a phased client transition which will complete by the end of the first quarter of 2025.

2.     Affluent: Quilter Channel

Although numbers of restricted advisers have declined modestly from the end December proforma level, this largely reflects expected natural attrition from retirements while new recruitment has been muted reflecting a broader focus on the regulatory investigations underway across the industry. We actively manage planned retirements to ensure that we largely retain departing adviser client assets under our National Retirement Plan.

We continued to invest in our Quilter Partners proposition, which combines investment and Platform alignment with the entrepreneurial drive and focus of owner-operated businesses. Five partner hub firms have now signed, and we are in discussion with a further three partner hub firms which are expected to become Quilter Partners in the second half of the year.

Our goal of delivering a more efficient operating model, increased adviser productivity and improved client experience through a range of technology and process solutions is progressing to plan, with delivery over a 2-3-year horizon. We are already seeing some early benefits and cost savings from these initiatives. 

3.     Affluent: IFA Channel

Initiatives to improve market share contributed to a meaningful year-on-year increase in gross IFA Platform flows which, in turn, led to a significant increase in net flows. Net IFA flows onto Platform increased to £964 million in the first half (H1 2023: £17 million). This has been achieved by increased support to adviser firms through the provision of value-added tools and services, the attractiveness of our family linking pricing and continued propositional developments such as faster payment services and our CashHub offering.

4.     Simplification Phase II

Our second stage Simplification plans target £50 million of cost savings by end 2025 on a run-rate basis from the simplification of our governance and internal administration processes together with our Advice and High Net Worth initiatives. £26 million of these savings were delivered by end-June 2024 on a run-rate basis. This programme will support our goal of operating sustainably above our 30% operating margin target in the medium term.

Culture

Building the right culture where all our people can truly thrive is also important to me. We have launched a new three-year inclusion and diversity action plan to expand upon the success of our original action plan, launched in 2022. Our commitment to increase the proportion of senior leadership roles held by women to 40% by 2025, including Executive Committee and direct reports, has already been achieved. At 30 June 2024, 45% of Quilter's senior leadership roles are held by women. In 2020, 2% of Quilter's senior leadership roles were held by ethnically diverse colleagues. That proportion had increased to 9% as of 30 June 2024, and we are committed to increasing this further to 13% by 2027.

Outlook

The first half of 2024 has been a period of strong progress and reflects my focus on delivering strong business performance while fundamentally changing the way we work. My objectives are simple - 1) to remain absolutely customer focused while making Quilter more efficient and responsive to the external environment; and 2) to deliver the faster growth and higher returns our shareholders expect.

We expect lower second half investment income reflecting a gradual decline in interest rates and planned capital investment to grow our business. When combined with normal revenue margin attrition, this is likely to largely offset the income benefit from net flows leading to broadly stable second half revenues, assuming normal markets. We are also planning for higher second half costs to fund investment in growth initiatives and our brand. While this means second half profit is unlikely to match the level of the first half, our strong cost discipline means that the expected cost out-turn for the year is anticipated to be modestly lower than the c.£490 million level guided at our Full Year results in March.

The new UK Government has an agenda of stimulating growth in order to create fiscal capacity for future public spending. While there has been a commitment not to increase the primary taxes, potential for changes in other taxes, such as CGT or IHT, is likely to stimulate demand for financial advice. A pension policy review is expected to focus on areas such as auto-enrolment and adjusting contribution thresholds, both of which have limited direct impact on Quilter. However, we anticipate that this review may well broaden to consider pension freedoms, particularly in providing greater support to individuals accessing their pensions for the first time. This is likely to be closely associated with the Advice Guidance Boundary Review, where we are engaging with the Government and Regulators and for which we are actively positioning our business.

More broadly, the secular growth characteristics that support our business - the need to take personal responsibility to save for retirement - remains intact and we remain focused on supporting our clients to achieve their goals in this regard. Our plans to build distribution, enhance propositions and drive efficiency will continue to deliver strong outcomes for all our stakeholders in the years ahead. We look forward to the future with confidence - both in our ability to deliver on our potential and to continue delivering good outcomes for our clients.

Steven Levin

Chief Executive Officer

Financial review

Review of financial performance

Overview

During the first half of 2024 the Group delivered strong growth, with adjusted profit of £97 million, an increase of 28% on the prior period (H1 2023: £76 million). Increased interest rates which supported investment returns on shareholder cash, supportive markets that increased average AuMA, improved net inflows and strong cost management through our Simplification programme, all contributed to this outcome. The Group's reported closing AuMA was £113.8 billion, a 7% increase on the opening position (FY 2023: £106.7 billion).  

Alternative Performance Measures ("APMs")

We assess our financial performance using a variety of measures including APMs, as explained further on pages 15 to 17. In the headings and tables presented, these measures are indicated with an asterisk: *.

Key financial highlights

Quilter highlights		H1 2024	H1 2023
Assets and flows - core business
AuMA* (£bn)		110.6	98.3
Gross flows* (£bn)		7.4	5.5
Net inflows* (£bn)		1.7	0.7
Net inflows/opening AuMA* (annualised)		3%	1%
Productivity: Quilter channel gross sales per Quilter Adviser* (£m)1 (annualised)		3.2	2.7
Asset retention* (annualised)		89%	90%
Assets and flows - reported
AuMA* (£bn)		113.8	101.7
Gross flows* (£bn)		7.5	5.5
Net inflows* (£bn)		1.5	0.2
Net inflows/opening AuMA* (annualised)		3%	0%
Profit and loss
IFRS profit before tax attributable to shareholder returns (£m)		18	7
IFRS profit after tax (£m)		13	5
Adjusted profit before tax* (£m)		97	76
Operating margin*		29%	24%
Revenue margin* (bps)		45	48
Return on equity* (annualised)		9.6%	7.5%
Adjusted diluted earnings per share * (pence)		5.2	4.3
Interim Dividend per share (pence)		1.7	1.5
Basic earnings per share (pence)		1.0	0.4
Non-financial
Total Restricted Financial Planners ("RFPs") in both segments2		1,437	1,511
Discretionary Investment Managers in High Net Worth segment2		175	178
1Quilter channel gross sales per Quilter Adviser is a measure of the value created by our Quilter distribution channel.
2Closing headcount as at 30 June.

Consumer confidence and investor sentiment improved during the first half of 2024, supported by reductions in cost inflation and increased wage growth. This improved macro environment, coupled with our own proposition enhancements and distribution initiatives, resulted in a 164% improvement in net inflows for the core business of £1.7 billion for the first half of 2024 (H1 2023: £0.7 billion). Gross flows were 35% higher than the prior period at £7.4 billion (H1 2023: £5.5 billion), supported by strong Quilter Channel flows and an improved market share from IFA firms which led to higher flows onto the Platform.

In the Affluent segment, we experienced strong contributions from both channels:

·      Quilter channel: Gross flows of £2.1 billion were 16% higher than the prior period (H1 2023: £1.8 billion). Net inflows of £1.1 billion were 22% ahead of the prior period (H1 2023: £0.9 billion). We continue to experience strong support from back book transfers with c.£450 million of assets under advice by Quilter Financial Planning transferred onto our Platform from external platforms in the first half of the year (H1 2023: c.£330 million), in line with our strategic objective of aligning our Advice business. Productivity, representing Quilter channel annualised gross sales per Quilter Adviser, increased to £3.2 million (H1 2023: £2.7 million). Annualised net inflows as a percentage of opening AuMA for the Quilter channel were 12% (H1 2023: 11%).

·      IFA channel: Gross inflows onto the Quilter Platform of £3.8 billion increased by 50% (H1 2023: £2.6 billion), as we focused strategically on building out our distribution and improving our market share of new business. Based on the latest available Fundscape data (Q1 2024), the Quilter Investment Platform maintains the leading market share of gross sales against our Retail Advised Platform peers. Net inflows were £964 million (H1 2023: £17 million) as we continued to win flows from competitor platforms. Annualised net inflows as a percentage of opening AuMA for the IFA channel onto the Quilter Investment Platform was 3% (H1 2023: nil).

·      Fund flows via third-party platforms reported net outflows of £241 million, compared to £190 million in the previous period.

Asset retention of 89% for the Affluent segment remains stable compared to the prior period (H1 2023: 89%).

Within the High Net Worth segment, gross inflows of £1.5 billion were up 33% on the £1.2 billion delivered in H1 2023. Net inflows of £107 million were ahead of the prior period (H1 2023: £54 million). An increase in net inflows from the Quilter channel were offset by the loss of a large value, low margin account during the second quarter within the IFA and direct channel. This contributed to a two percentage point reduction in High Net Worth asset retention to 89% (H1 2023: 91%).

The Group's core business AuMA of £110.6 billion is 7% ahead of the opening position (FY 2023: £103.4 billion) reflecting positive market movements of £5.5 billion and net inflows of £1.7 billion. The Affluent segment AuMA increased by 8% to £83.4 billion (FY 2023: £77.5 billion) of which £27.7 billion is managed by Quilter, versus the opening position of £25.5 billion. The High Net Worth Segment AuM was £28.7 billion, up 6% from the opening position of £27.0 billion, with all assets managed by Quilter.

In total, £55.9 billion, representing 51% of core business AuMA, is managed by Quilter across the Group (FY 2023: £52.2 billion, 50%).

The Group's revenue margin of 45 bps was 3 bps lower than that of the equivalent prior period (H1 2023: 48 bps).

In Affluent, the administered revenue margin was 25 bps which was 2 bps lower than the prior period (H1 2023: 27 bps), reflecting the reduction in our Platform administration fee to clients introduced in the second half of last year, and the impact of higher market levels moving a greater proportion of direct assets into lower margin bands under our tiered pricing structure. The managed revenue margin decreased by 6 bps to 37 bps (H1 2023: 43 bps) following the reprice of the Cirilium Active range last year and the introduction of AuM scale discounts. As previously guided, the proportion of total client assets invested in the Cirilium Active range, our highest revenue bps contributor, remained in outflow during the period. Conversely, the proportion of total client assets invested in the popular WealthSelect range continues to increase, with this MPS range now one of the largest in the industry at £16.2 billion (H1 2023: £11.5 billion).

The revenue margin in the High Net Worth segment decreased by 2 bps to 71 bps (H1 2023: 73 bps), but remains in line with the revenue margin for FY 2023 of 71 bps.

Adjusted profit before tax increased by 28% to £97 million (H1 2023: £76 million). Net management fees of £245 million increased 1% (H1 2023: £242 million) primarily as a result of an increase in reported average AuMA period-on-period of 8% to £110.0 billion (H1 2023: £101.8 billion) offset by the planned reductions in net management fee margins that were implemented during 2023.

Interest revenue generated from client funds included within net management fees were £16 million (H1 2023: £7 million) reflecting the increased interest rates period-on-period and the changes made to the Platform charging structures in 2023. Other revenue of £47 million was up 12% reflecting higher average levels of assets under advice. Investment revenue, predominantly representing interest income generated on shareholder cash and capital resources, of £37 million increased by £9 million (H1 2023: £28 million) due to higher interest rates in 2024 compared to the equivalent prior period. We expect investment income to decline from current levels over the second half of the year as interest rates are anticipated to decrease, accompanied by a gradual decline in the level of cash and capital resources reflecting planned investment in the business and business transformation spend.

Operating expenses of £232 million decreased by 2% on the prior period (H1 2023: £236 million) supported by Simplification cost savings, partially offset by the impact of inflation. The Group operating margin improved by 5 percentage points to 29% (H1 2023: 24%).

The Group's IFRS profit after tax was £13 million compared to £5 million for H1 2023. This reflects the improvement in the adjusted profit result, partially offset by variances in policyholder tax outcomes due to market gains in the first half of the year.

Adjusted diluted earnings per share increased 21% to 5.2 pence (H1 2023: 4.3 pence).

Total net revenue*

Total net revenue H1 2024 (£m)			Affluent	High Net Worth	Head Office	Quilter plc
Net management fee*1			147	98	-	245
Other revenue*			39	11	(3)	47
Investment revenue*			20	3	14	37
Total net revenue*			206	112	11	329

Total net revenue H1 2023 (£m)			Affluent	High Net Worth	Head Office	Quilter plc
Net management fee*1			147	95	-	242
Other revenue*			34	11	(3)	42
Investment revenue*			14	2	12	28
Total net revenue*			195	108	9	312
1Net management fee includes the interest earned on client holdings in Quilter Cheviot and Quilter Investment Platform.

Total net revenue for the Affluent segment was £206 million, an increase of 6% from the previous period (H1 2023: £195 million). Net management fees were £147 million, in line with prior year (H1 2023: £147 million). Within net management fees, higher average AuMA and interest sharing arrangements on cash balances held on the Platform, which amounted to £10 million in the first half of the year (H1 2023: £1 million), contributed positively to the revenue generated. This was offset by changes to the mix of assets and planned changes to the margins generated, predominantly the Cirilium Active reprice implemented in Q1 2023 and the new Platform pricing policy introduced in the second half of 2023.

Other revenue, which mainly consists of our share of income from providing advice within Quilter Financial Planning, was £39 million, 15% more than the previous period (H1 2023: £34 million). This includes higher recurring charges from higher average levels of assets under advice. Investment revenue of £20 million (H1 2023: £14 million) represents interest earned on shareholder capital held to meet the regulatory capital requirements of the business.

Total net revenue of £112 million in the High Net Worth segment was 4% higher on the previous period (H1 2023: £108 million). Net management fees were ahead of the prior period at £98 million (H1 2023: £95 million) largely due to higher average AuM partially offset by changes to fee structures introduced in the second half of 2023. Net management fees include interest margin earned on client cash balances of £6 million (H1 2023: £6 million). Investment revenue, representing revenue earned on regulatory capital to support the business, of £3 million was £1 million higher (H1 2023: £2 million) due to higher interest rates. Other revenue of £11 million was in line with the prior period (H1 2023: £11 million) and predominantly reflects revenue generated in Quilter Cheviot Financial Planning.

Operating expenses*

Operating expenses decreased by 2% to £232 million (H1 2023: £236 million). Our focus on embedding sustainable cost savings through business simplification activities enabled us to achieve a lower cost base whilst absorbing inflationary headwinds.

Operating expenses (£m)	H1 2024		H1 2023
	Operating Expenses	As a percentage  of revenues	Operating Expenses	As a percentage   of revenues
Support staff costs	51		54
Operations	6		8
Technology	10		12
Property	14		15
Other base costs1	17		16
Sub-total base costs	98	30%	105	34%
Revenue-generating staff base costs	54	16%	51	16%
Variable staff compensation	38	12%	38	12%
Other variable costs2	30	9%	28	9%
Sub-total variable costs	122	37%	117	38%
Regulatory/professional indemnity costs	12	4%	14	4%
Operating expenses*	232	71%	236	76%
1Other base costs includes depreciation and amortisation, audit fees, shareholder costs, listed Group costs and governance.
2Other variable costs includes FNZ costs, development spend and corporate functions variable costs.

At our Capital Markets Day in November 2021, we announced a target to deliver £45 million of annualised run-rate savings through our Business Simplification programme by the end of 2024. This target was delivered a year early by the end of 2023.

With our 2023 half-year results, we announced a further £50 million of annualised run rate savings from the Business Simplification programme with this anticipated to be delivered on a run-rate basis by the end of 2025. At 30 June 2024, the programme had delivered £26 million of these savings, on a run-rate basis, largely through the continued rationalisation of the Group's technology and property estate, IT and operations efficiencies from our investment in Advice technology, and a reduction in support costs as we continue to simplify our governance and internal administration processes. These benefits were partially offset by the impact of inflation on our cost base during the period. As a result, base costs as a percentage of revenues reduced 4 percentage points to 30% (H1 2023: 34%).

Revenue-generating staff base costs increased by 6% to £54 million (H1 2023: £51 million) and remains at a similar proportion of revenues as we continue to invest in our people and proposition across our business segments to drive growth.

Variable staff compensation of £38 million (H1 2023: £38 million) was at a similar level to the prior period, while other variable costs of £30 million (H1 2023: £28 million) were marginally above that of the previous period, mainly driven by the increase in the average AuMA experienced over the period.

Regulatory and professional indemnity costs decreased by 14% to £12 million (H1 2023: £14 million) predominantly reflecting a lower FSCS Levy cost in the first half of the year.

Taxation

The effective tax rate ("ETR") on adjusted profit before tax was 25.4% (H1 2023: 24.4%). The Group's ETR is broadly in line with the UK headline corporation tax rate of 25% and there are no material movements for the year. The Group's ETR is dependent on a number of factors, including tax rates on profits in jurisdiction outside the UK and the value of non-deductible expenses or non-taxable income.

The Group's IFRS income tax expense was a charge of £64 million for the period ended 30 June 2024, compared to a charge of £23 million for the prior period. The income tax expense or credit can vary significantly period-on-period as a result of market volatility and the impact that market movements have on policyholder tax. The recognition of the income received from policyholders to fund the policyholder tax liability (which is included within the Group's IFRS revenue) can vary in timing to the recognition of the corresponding policyholder tax expense, creating volatility to the Group's IFRS profit or loss before tax attributable to shareholder returns. An adjustment is made to adjusted profit before tax to remove these distortions, as explained further in note 5(b) to the condensed consolidated interim financial statements.

Reconciliation of adjusted profit before tax* to IFRS profit

Adjusted profit before tax represents the Group's IFRS profit, adjusted for specific items that management considers to be outside of the Group's normal operations or one-off in nature, as detailed in note 5(a) in the condensed consolidated interim financial statements. The exclusion of certain adjusting items may result in adjusted profit before tax being materially higher or lower than the IFRS profit after tax.

Adjusted profit before tax does not provide a complete picture of the Group's financial performance, which is disclosed in the IFRS consolidated statement of comprehensive income, but is instead intended to provide additional comparability and understanding of the financial results.

Reconciliation of adjusted profit before tax to IFRS profit after tax (£m)			Six months ended 30 June 2024		Six months ended 30 June 2023
Affluent			72		54
High Net Worth			25		23
Head Office			-		(1)
Adjusted profit before tax*			97		76
Adjusting items:
Impact of acquisition and disposal-related accounting			(19)		(21)
Business transformation costs			(12)		(16)
Customer remediation			-		(3)
Ongoing Advice Evidence			(2)		-
Exchange rate movement (ZAR/GBP)			1		(2)
Policyholder tax adjustments			(38)		(18)
Other adjusting items			-		1
Finance costs			(9)		(10)
Total adjusting items before tax			(79)		(69)
Profit before tax attributable to shareholder returns			18		7
Tax attributable to policyholder returns			59		21
Income tax expense			(64)		(23)
IFRS profit after tax			13		5

The impact of acquisition and disposal-related accounting costs of £19 million (H1 2023: £21 million) includes amortisation of acquired intangible assets.

Business transformation costs of £12 million were incurred in H1 2024 (H1 2023: £16 million). During the first half of the year, the Group spent £11 million on delivering Simplification initiatives (H1 2023: £14 million). The implementation costs to deliver the remaining £24 million of annualised run-rate savings for the programme are estimated to be £67 million.

For the period ended 30 June 2023, the customer remediation expense of £3 million reflected £1 million of legal, consulting and other costs and a £2 million provision increase related to non-British Steel Pension Scheme redress payments. This was the result of the Group-managed past business review of DB to DC pension transfer advice suitability by an independent expert. At 30 June 2024, the provision for potential redress and associated professional fees was decreased from the 2023 year end by £1 million as a result of professional fees paid during 2024, to £5 million. Further details of the provision are provided in note 16 of the condensed consolidated interim financial statements.

Ongoing Advice Evidence costs of £2 million (H1 2023: £nil) includes the estimated external cost to support and perform the Skilled Person review of historical data and practices across the Quilter Financial Planning network of Appointed Representative firms, as detailed in note 17 of the condensed consolidated interim financial statements. This cost is excluded from adjusted profit as management considers it to be outside of the Group's normal operations and one-off in nature.

Exchange rate movements for the first half of the year was an income of £1 million (H1 2023: £2 million expense) which relates to foreign exchange movements on cash held in South African Rand in preparation for dividend payments to shareholders.

Policyholder tax adjustments to adjusted profit were a credit of £38 million for the first half of 2024 (H1 2023: credit of £18 million) in relation to the removal of timing differences arising from market volatility that can, in turn, lead to volatility in the policyholder tax charge between years. The recognition of the income received from policyholders (which is included within the Group's IFRS revenue) to fund the policyholder tax liability can vary in timing to the recognition of the corresponding tax expense, creating volatility to the Group's IFRS profit before tax.

Review of financial position

Capital and liquidity

Solvency II

The Group's Solvency II surplus is £1,015 million at 30 June 2024 (31 December 2023: £972 million), representing a Solvency II ratio of 268% (31 December 2023: 271%). The Solvency II information for the six months to 30 June 2024 contained in this results disclosure has been prepared on a pro forma basis and has not been audited.

The Group's capital and liquidity assessments at the half year included stress and scenario tests that were updated in view of the uncertainties that exist in relation to Ongoing Advice Evidence and the Skilled Person review, as detailed in note 17 of the condensed consolidated interim financial statements.

The Group's Solvency II capital position is stated after allowing for the impact of the foreseeable dividend payment of £23 million (31 December 2023: £50 million).

		At 30 June	At 31 December
Group Solvency II capital (£m)		20241	20232
Own funds		1,620	1,540
Solvency capital requirement ("SCR")		605	568
Solvency II surplus		1,015	972
Solvency II coverage ratio		268%	271%
1Based on preliminary estimates and including the impact of year-to-date profits.
2As reported in the Group Solvency and Financial Condition Report for the year ended 31 December 2023.

The Group Solvency II ratio remains broadly in line with the position as at 31 December 2023.

Composition of qualifying Solvency II capital

The Group's own funds include the Quilter plc issued subordinated debt security which qualifies as capital under Solvency II. The composition of own funds by tier is presented in the table below.

		At 30 June	At 31 December
Group own funds (£m)		2024	2023
Tier 11		1,420	1,336
Tier 22		200	204
Total Group Solvency II own funds		1,620	1,540
1All Tier 1 capital is unrestricted for tiering purposes.
2Comprises a Solvency II compliant subordinated debt security in the form of a Tier 2 bond, which was issued at £200 million in January 2023.

The Group SCR is covered by Tier 1 capital, which represents 235% of the Group SCR of £605 million. Tier 2 capital represents 20% of the Group Solvency II surplus.

Interim Dividend

The Quilter Board declared an Interim Dividend for 2024 of 1.7 pence per share at a total cost of £23 million. The Interim Dividend will be paid on 23 September 2024 to shareholders on the UK and South African share registers on 30 August 2024. For shareholders on our South African share register an Interim Dividend of 39.96076 South African cents per share will be paid on 23 September 2024, using an exchange rate of 23.50633.

Holding company cash

The holding company cash statement includes cash flows generated by the three main holding companies within the business: Quilter plc, Quilter Holdings Limited and Quilter UK Holding Limited. The flows associated with these companies will differ markedly from those disclosed in the statutory statement of cash flows, which comprises flows from the entire Quilter plc Group including policyholder movements.

Holding company cash (£m)			H1 2024	FY 2023
Opening cash at holding companies at 1 January			349	392
Share repurchase and Odd-lot Offer			-	(14)
Single Strategy business sale - price adjustment provision			-	(4)
Debt issuance costs			-	(2)
Dividends paid			(50)	(65)
Net capital movements			(50)	(85)
Head Office costs and Business transformation funding			(15)	(43)
Net interest received			7	13
Finance costs			(9)	(18)
Net operational movements			(17)	(48)
Cash remittances from subsidiaries			174	176
Capital contributions, loan repayments and investments			(54)	(86)
Other net movements			1	-
Internal capital and strategic investments			121	90
Closing cash at holding companies at the end of the period			403	349

Net capital movements

Net capital movements in the period totalled an outflow of £50 million, which relates to the dividend payments made to shareholders.

Net operational movements

Net operational movements were an outflow of £17 million for the period, which includes £15 million of corporate and Business transformation costs, finance costs of £9 million relating to coupon payments on the Tier 2 bond and non-utilisation fees for the revolving credit facility, and £7 million of net interest income received on money market funds, Group loans and cash holdings.

Internal capital and strategic investments

The net inflow of £121 million is principally due to £174 million of cash remittances from the trading businesses, partially offset by £54 million of capital contributions to support business operational activities and further investment in the underlying business.

Shareholder information - Interim Dividend

The Quilter Board has declared an Interim Dividend of 1.7 pence per share. The 2024 Interim Dividend will be paid on Monday 23 September 2024 to shareholders on the UK and South African share registers on Friday 30 August 2024 (the "Record Date").

Dividend Timetable

Dividend announcement in pounds sterling with South Africa ZAR equivalent	Wednesday 7 August 2024
Last day to trade cum dividend in South Africa	Tuesday 27 August 2024
Shares trade ex-dividend in South Africa	Wednesday 28 August 2024
Shares trade ex-dividend in the UK	Thursday 29 August 2024
Record Date in the UK and South Africa	Friday 30 August 2024
Interim Dividend payment date	Monday 23 September 2024

From the opening of trading on Wednesday 7 August 2024 until the close of business on Friday 30 August 2024, no transfers between the London and Johannesburg registers will be permitted. Share certificates for shareholders on the South African register may not be dematerialised or rematerialised between Wednesday 28 August 2024 and Friday 30 August 2024, both dates inclusive.

Additional information

For shareholders on our South African share register an Interim Dividend of 39.96076 South African cents per share will be paid on Monday 23 September 2024, based on an exchange rate of 23.50633. Dividend Tax will be withheld at the rate of 20% from the amount of the gross dividend of 39.96076 South African cents per share paid to South African shareholders unless a shareholder qualifies for exemption. After the Dividend Tax has been withheld, the net Interim Dividend will be 31.96861 South African cents per share. The Company had a total of 1,404,105,498 shares in issue at today's date.

If you are uncertain as to the tax treatment of any dividends, you should consult your own tax adviser.

Supplementary information

Alternative Performance Measures ("APMs")

We assess our financial performance using a variety of measures including APMs, as explained further on pages 15 to 17. These measures are indicated with an asterisk: *.

For the period ended 30 June 2024

1.     Key financial data

2024 YTD gross flows, net flows & AuMA (£bn), unaudited	AuMA as at 31 December 2023	Gross   flows (£m)	Net flows (£m)	AuMA as at 30 June 2024	Of which managed by Quilter AuM as at 30 June 2024
AFFLUENT SEGMENT
Quilter channel1	17.2	2,053	1,056	17.9	14.0
IFA channel on Quilter Investment Platform	58.7	3,846	964	63.6	11.8
Funds via third-party platform	1.6	204	(241)	1.9	1.9
Total Affluent segment core business	77.5	6,103	1,779	83.4	27.7
HIGH NET WORTH SEGMENT
Quilter channel	2.9	386	307	3.3	3.3
IFA channel incl. Direct	24.1	1,146	(200)	25.4	25.4
Total High Net Worth segment	27.0	1,532	107	28.7	28.7
Inter-Segment Dual Assets2	(1.1)	(221)	(153)	(1.5)	(0.5)
Quilter plc core business	103.4	7,414	1,733	110.6	55.9
Non-core	3.3	38	(202)	3.2	2.0
Quilter plc reported	106.7	7,452	1,531	113.8	57.9
Affluent AuMA breakdown (incl. Non-core):
Affluent administered only	53.2	3,441	1,115	56.9
Affluent managed and administered	20.6	2,190	1,097	23.1
Quilter Platform Sub-Total3	73.8	5,631	2,212	80.0
Affluent external platform	7.0	510	(635)	6.6
Affluent Total (Including Non-core)	80.8	6,141	1,577	86.6
1 Quilter channel YTD Platform discrete gross flows and net flows were £1,777 million and £1,304 million respectively, with closing AuMA of £15.2 billion. 2Inter-segment dual assets reflect funds managed by Quilter Cheviot and administered by Quilter Investors and the Quilter Cheviot managed portfolio service solutions available to advisers on the Quilter Investment Platform. This is excluded from total AuMA to ensure no double count takes place. 3The Quilter Platform includes £8 million of gross flows, £56 million of net outflows and £1.2 billion of closing AuA related to non-core assets.

2023 YTD gross flows, net flows & AuMA (£bn), unaudited	AuMA as at 31 December 2022	Gross   flows (£m)	Net flows (£m)	AuMA as at 30 June 2023	Of which managed by Quilter AuM as at 30 June 2023
AFFLUENT SEGMENT
Quilter channel1	15.4	1,775	863	15.9	12.2
IFA channel on Quilter Investment Platform	54.1	2,557	17	55.8	9.6
Funds via third-party platform	2.0	144	(190)	1.6	1.6
Total Affluent segment core business	71.5	4,476	690	73.3	23.4
HIGH NET WORTH SEGMENT
Quilter channel	2.4	266	195	2.6	2.6
IFA channel incl. Direct	23.1	884	(141)	23.3	23.3
Total High Net Worth segment	25.5	1,150	54	25.9	25.9
Inter-Segment Dual Assets2	(0.8)	(122)	(88)	(0.9)	(0.3)
Quilter plc core business	96.2	5,504	656	98.3	49.0
Non-core	3.4	41	(457)	3.4	2.2
Quilter plc reported	99.6	5,545	199	101.7	51.2
Affluent AuMA breakdown (incl. Non-core):
Affluent administered only	50.0	2,371	302	51.1
Affluent managed and administered	17.0	1,620	701	18.3
Quilter Platform Sub-Total3	67.0	3,991	1,003	69.4
Affluent external platform	7.9	526	(770)	7.3
Affluent Total (Including Non-core)	74.9	4,517	233	76.7
1 Quilter channel YTD Platform discrete gross flows and net flows were £1,430 million and £1,042 million respectively, with closing AuMA of £12.4 billion. 2Inter-segment dual assets reflect funds managed by Quilter Cheviot and administered by Quilter Investors and the Quilter Cheviot managed portfolio service solutions available to advisers on the Quilter Investment Platform. This is excluded from total AuMA to ensure no double count takes place. 3The Quilter Platform includes £4 million of gross flows, £56 million of net outflows and £1.2 billion of closing AuA related to non-core assets.

Estimated asset allocation (%)		H1 2024	FY 2023
Fund profile by investment type, unaudited		Total client AuMA	Total client AuMA
Fixed interest		24%	26%
Equities		65%	63%
Cash		4%	5%
Property and alternatives		7%	6%
Total		100%	100%

1. Affluent

The following table presents certain key financial metrics utilised by management with respect to the business units of the Affluent segment, for the periods indicated.

Key financial highlights	H1 2024	H1 2023	% change
Affluent Administered
Net management fees (£m)*	94	93	1%
Other revenue (£m)*	3	-	-
Investment revenue (£m)*	15	12	25%
Total net revenue	112	105	7%
Net flows (£m)*	2,212	1,003	121%
Closing AuMA (£bn)*	80.0	69.4	15%
Average AuMA (£bn)*	76.7	68.9	11%
Revenue margin (bps)*	25	27	(2) bps
Asset retention (%)*	91%	91%	-
Affluent Managed
Net management fees (£m)*	53	54	(2%)
Other revenue (£m)*	-	-	-
Investment revenue (£m)*	2	1	100%
Total net revenue	55	55	-
Net flows (£m)*	462	(69)	-
Closing AuM (£bn)*	29.7	25.6	16%
Average AuM (£bn)*	28.6	25.5	12%
Revenue margin (bps)*	37	43	(6) bps
Asset retention (%)*	84%	82%	2 ppts
Advice (Quilter Financial Planning)
Net management fees (£m)*	-	-	-
Other revenue (£m)*	36	34	6%
Investment revenue (£m)*	3	1	200%
Total net revenue*	39	35	11%
RFPs (number)	1,369	1,447	(5%)

2. High Net Worth

The following table presents certain key financial metrics utilised by management with respect to the business units of the High Net Worth segment, for the periods indicated.

Key financial highlights	H1 2024	H1 2023	% change
Quilter Cheviot
Net management fees (£m)*	98	95	3%
Other revenue (£m)*	1	1	-
Investment revenue (£m)*	3	2	50%
Total net revenue	102	98	4%
Net flows (£m)*	107	54	98%
Closing AuM (£bn)*	28.7	25.9	11%
Average AuM (£bn)*	27.7	25.9	7%
Revenue margin (bps)*	71	73	(2) bps
Asset retention (%)*	89%	91%	(2) ppts
Discretionary Investment Managers (number)*	175	178	(2%)
Advice (Quilter Cheviot Financial Planning)
Net management fees (£m)*	-	-	-
Other revenue (£m)*	10	10	-
Investment revenue (£m)*	-	-	-
Total net revenue*	10	10	-
RFPs (number)	68	64	6%

Financial performance by segment

The following table presents a breakdown of financial performance by segment and Quilter plc for the periods indicated.

Financial performance H1 2024 (£m)			Affluent	High Net Worth	Head Office	Quilter plc
Net management fee*1			147	98	-	245
Other revenue*			39	11	(3)	47
Investment revenue*			20	3	14	37
Total net revenue*			206	112	11	329
Operating expenses*			(134)	(87)	(11)	(232)
Adjusted profit before tax*			72	25	-	97
Tax						(25)
Adjusted profit after tax*						72
Operating margin (%)*			35%	22%		29%
Revenue margin (bps)*			35	71		45

Financial performance H1 2023 (£m)			Affluent	High Net Worth	Head Office	Quilter plc
Net management fee*1			147	95	-	242
Other revenue*			34	11	(3)	42
Investment revenue*			14	2	12	28
Total net revenue*			195	108	9	312
Operating expenses*			(141)	(85)	(10)	(236)
Adjusted profit before tax*			54	23	(1)	76
Tax						(18)
Adjusted profit after tax*						58
Operating margin (%)*			28%	21%		24%
Revenue margin (bps)*			38	73		48

¹Net management fee includes the interest earned on client holdings in Quilter Cheviot and Quilter Investment Platform.

Alternative Performance Measures

We assess our financial performance using a variety of alternative performance measures ("APMs"). APMs are not defined under IFRS, but we use them to provide further insight into the financial performance, financial position and cash flows of the Group and the way it is managed.

APMs should be read together with the Group's condensed consolidated interim financial statements, which include the Group's statement of comprehensive income, statement of financial position and statement of cash flows, which are presented on pages 21 to 24.

Further details of APMs used by the Group in its Financial review are provided below.

APM	Definition
Adjusted profit before tax	Adjusted profit before tax represents the Group's IFRS profit, adjusted for specific items that management consider to be outside of the Group's normal operations or one-off in nature, as detailed in note 5(a) in the condensed consolidated interim financial statements. The exclusion of certain adjusting items may result in adjusted profit before tax being materially higher or lower than the IFRS profit after tax. Adjusted profit before tax does not provide a complete picture of the Group's financial performance, which is disclosed in the IFRS consolidated statement of comprehensive income, but is instead intended to provide additional comparability and understanding of the financial results. A detailed reconciliation of the adjusted profit before tax metrics presented, and how these reconcile to IFRS, is provided on page 8 of the Financial review. Adjusted profit before tax is referred to throughout the Chief Executive Officer's statement and Financial review, with comparison to the prior year explained on page 6. A reconciliation from each line of the Group's IFRS income and expenses to adjusted profit before tax is provided in note 5(c) to the condensed consolidated interim financial statements.
Adjusted profit after tax	Adjusted profit after tax represents the post-tax equivalent of the adjusted profit before tax measure, as defined above.
Revenue margin (bps)	Revenue margin represents net management fees (annualised), divided by average AuMA. Management use this APM as it represents the Group's ability to earn revenue from AuMA. Revenue margin by segment and for the Group is explained on page 6 of the Financial review.
Operating margin	Operating margin represents adjusted profit before tax divided by total net revenue. Management use this APM as this is an efficiency measure that reflects the percentage of total net revenue that becomes adjusted profit before tax. Operating margin is referred to in the Chief Executive Officer's statement and Financial review, with comparison to the prior year explained in the adjusted profit section on page 6.
Gross flows	Gross flows are the gross client cash inflows received from customers during the period and represent our ability to increase AuMA and revenue. Gross flows are referred to in the Financial review on pages 5 to 6 and disclosed by segment in the supplementary information on pages 11 to 12.
Net flows	Net flows are the difference between money received from and returned to customers during the relevant period for the Group or for the business indicated. This measure is a lead indicator of total net revenue. Net flows is referred to throughout this document, with a separate section in the Financial review on pages 5 to 6 and is presented by business and segment in the supplementary information on pages 11 to 12.
Assets under Management and Administration ("AuMA")	AuMA represents the total market value of all financial assets managed and administered on behalf of customers. AuMA is referred to throughout this document, with a separate section in the Financial review on page 6 and is presented by business and segment in the supplementary information on pages 11 to 12.
Non-core AuMA	Non-core AuMA and associated gross and net flows represents assets managed on behalf of businesses we have sold together with some legacy funds which are in run-off and remain in outflow.
Average AuMA	Average AuMA represents the average total market value of all financial assets managed and administered on behalf of customers. Average AuMA is calculated using a 7-point average (half year) and 13-point average (full year) of monthly closing AuMA.
Total net revenue	Total net revenue represents revenue earned from net management fees, investment revenue and other revenue listed below and is a key input into the Group's operating margin. Further information on total net revenue is provided on pages 6 to 7 of the Financial review and note 5(c) in the condensed consolidated interim financial statements.
Net management fees	Net management fees consist of revenue generated from AuMA, fixed fee revenues including charges for policyholder tax contributions, interest earned on client holdings, less trail commissions payable. Net management fees are presented net of trail commission payable as trail commission is a variable cost directly linked to revenue, which is a treatment and presentation commonly used across our industry. Net management fees are a part of total net revenue and is a key input into the Group's operating margin. Further information on net management fees is provided on pages 6 to 7 in the Financial review and note 5(c) in the condensed consolidated interim financial statements.
Other revenue	Other revenue represents revenue not directly linked to AuMA (e.g. encashment charges, closed book unit-linked policies, adviser initial fees and adviser fees linked to AuMA in Quilter Financial Planning (recurring fees)). Other revenue is a part of total net revenue, which is included in the calculation of the Group's operating margin. Further information on other revenue is provided on pages 6 to 7 in the Financial review and note 5(c) in the condensed consolidated interim financial statements.
Investment revenue	Investment revenue includes interest on shareholder cash balances (including cash at bank and money market funds). Further information on investment revenue is provided on pages 6 to 7 in the Financial review and note 5(c) in the condensed consolidated interim financial statements.
Operating expenses	Operating expenses represent the costs for the Group, which are incurred to earn total net revenue and excludes the impact of specific items that management considers to be outside of the Group's normal operations or one-off in nature. Operating expenses are included in the calculation of adjusted profit before tax and impact the Group's operating margin. A reconciliation of operating expenses to the applicable IFRS line items is included in note 5(c) to the condensed consolidated interim financial statements, and the adjusting items excluded from operating expenses are explained in note 5(b). Operating expenses are explained on page 7 of the Financial review.
Asset retention	The asset retention rate measures our ability to retain assets from delivering good customer outcomes and investment performance. Asset retention reflects the annualised gross outflows of the AuMA during the period as a percentage of opening AuMA. Asset retention is calculated as: 1 - (annualised gross outflow divided by opening AuMA). Asset retention is provided for the Group's core business on page 5, and by segment on page 13.
Net inflows/opening AuMA	This measure is calculated as net flows annualised (as described above) divided by opening AuMA presented as a percentage. This metric is provided on page 5.
Quilter channel gross sales per Quilter Adviser	This measure represents the value created by our Quilter distribution channel and is an indicator of the success of our multi-channel business model. The measure is calculated as gross flows (annualised) generated by the Quilter channel through the Quilter Investment Platform, Quilter Investors or Quilter Cheviot per average Restricted Financial Planner in both segments. This metric is provided on page 5.
Return on Equity ("RoE")	Return on equity calculates how many pounds of profit the Group generates with each pound of shareholder equity. This measure is calculated as adjusted profit after tax annualised divided by average equity. Equity is adjusted for the impact of discontinued operations, if applicable. Return on equity is provided on page 5.
Adjusted diluted earnings per share	Adjusted diluted earnings per share is calculated as adjusted profit after tax divided by the diluted weighted average number of shares. A view of adjusted diluted earnings per share and the calculation of all EPS metrics, is shown in note 8 to the condensed consolidated interim financial statements.
Headline earnings per share	The Group is required to calculate headline earnings per share in accordance with the Johannesburg Stock Exchange Listing Requirements, determined by reference to the South African Institute of Chartered Accountants' circular 1/2023 Headline Earnings. This is calculated on a basic and diluted basis. For details of the calculation, refer to note 8 of the condensed consolidated interim financial statements.

 

END