Shareholder returns and dividend
In 2021 Quilter’s total shareholder return was broadly flat. While this performance was better than our pure platform peers, it was below the level achieved by our discretionary fund management peers and the UK market, with the FTSE-100 and FTSE-250 both delivering a total return of around 18%. However, we largely attribute this underperformance to the sale of Quilter International, which while short-term dilutive to our earnings, was absolutely the right thing to do from a strategic and financial perspective. Indeed, while the share price has been broadly flat over the year, the rating on our shares has increased with lower near-term earnings, post the sale of Quilter International, offset by a higher Price Earnings multiple on the smaller but faster growing business.
The £375 million Quilter Life Assurance share buyback programme which we announced with our 2019 full-year results continued over the course of the year. By the end of December 2021, £349 million of this programme had been completed. Since the year end, we have completed the remaining £26 million of buyback and this programme has now concluded. In aggregate, 264.1 million Quilter shares have been acquired, and cancelled, at an average price of 141.97 pence per share, thereby reducing our total share count by c.14% over the course of the programme.
The Board is pleased to recommend a Final Dividend of 3.9 pence for the 2021 financial year which, together with the Interim Dividend of 1.7 pence per share paid in September, takes the proposed Full Year Dividend to 5.6 pence. The pay-out ratio for 2021 was 51%. Following the revision to our target dividend pay-out range to 50%–70% of post-tax, post-interest adjusted profit, the 2021 dividend sits at the lower end of that new range. Subject to the operating environment remaining constructive, the Board expects future dividends to continue the progression up the target range. After excluding the component of the 2021 dividend that was effectively a return of capital from the Quilter International proceeds, the underlying dividend increase was 39%.
The dividend will be paid on 16 May 2022, subject to shareholder approval at our 2022 Annual General Meeting on 12 May 2022, to shareholders who are on the register on 8 April 2022.
In terms of Chair succession, Ruth Markland, our Senior Independent Director, is chairing a newly constituted Sub-Committee of the Board Corporate Governance and Nominations Committee to identify and recommend to the Board an appropriate individual to be appointed as the next Chair of Quilter. Further announcements will be made as and when appropriate.
2021 saw two additions to the Board with Tazim Essani and Chris Samuel being appointed as Non-executive Directors in March 2021 and July 2021 respectively. Tazim’s experience in senior executive roles at regulated financial services businesses has equipped her well to provide strategic guidance and constructive challenge to Quilter’s leadership team. Chris is an experienced Non-executive Director and has chaired the Quilter Financial Planning Board, our financial advice business, with distinction for the past 18 months. He has considerable experience in financial services, particularly in the areas of investment and asset management. This experience has enabled him to provide challenge, advice and support to Quilter’s management team on business performance and operational matters.
In January 2022, Rosie Harris who has been Chair of the Quilter Board Risk Committee since 2017, announced that she would not stand for re-election at the 2022 AGM as a recent external appointment had created practical difficulties for her attending Quilter meetings. We agreed with Rosie that she would step down from the Quilter Board effective 30 April 2022. A search for a successor to Rosie as Chair of the Board Risk Committee is under way.
We currently meet the Hampton-Alexander requirement for at least one third of the Board to be female and the Parker Review recommendation that all boards should have at least one ethnic minority Director. While we are content with the progress made in this area, we acknowledge that there is more to be done to drive greater diversity in our business at both Board and executive level.