St James’s Place Capital, the British wealth manager, improved its core profit for 2005 by more than 50 per cent with surging new business, pushing shares on Tuesday morning to their highest level since March 2002.

The company, which sells pension and insurance products, said on Tuesday its operating profit increased to £114.5m ($199.2m) in 2005, compared with £75.8m a year earlier, exceeding the consensus analyst forecast. Profit before tax rose 63 per cent to £213.4m, compared with £130.9m the year before, with the help of surging sales.

New business profits were up 47 percent to £67.2m due on sales of high-margin products, compared to £45.8m the previous year. Funds under management rose 29 per cent to £12.3bn.

“We are in a growth market and the Board believes that St James’s Place remains well positioned to capitalise on these opportunities going forward,” Mark Lund, chief executive, said in a statement.

Numis Securities raised its target price for St James’s Place by 60 pence to 320p referring to stronger than expected growth results. “Looking ahead, the group looks well placed to continue its growth due to increased demand for high quality financial advice”, the broker said, keeping its rating still as a “hold”.

St James’s Place Capital is regarded by analysts as being one of the biggest beneficiaries of new UK pension rules to be introduced in April, to encourage people to save more for retirement and giving them more flexibility about how to invest their pensions.

The company set a final dividend of 1.85p to give a total payout of 3.15p, versus 2.85p in 2004. Shares in the company were up 3.5 per cent at 313p in morning trade.

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