continued - St James's Place

Interim Management ReportFinancial CommentarycontinuedSECTION 3: CASH RESULT AND CAPITALNoted below are a number of issues regarding the post-tax cash result and the capital position.Cash ResultAs noted in the section above, the Board believes that the EEV approach provides the most meaningfulmeasure of the Group’s operating performance. However, EEV reflects all future cash flows, which in agrowing company may be significantly larger than the current level of cash being generated. To assistshareholders, this section provides disclosure on the underlying post-tax cash result of the Group.The cash result is the combination of the cash arising from the business in force at the start of the year less theinvestment to acquire the new business in the current period. In effect, a proportion of the cash arising fromthe in-force business is reinvested for future cash returns.During the six months the net cash result at £30.8 million increased by 65% compared with the £18.7 millionin the first six months of 2010.The tables and commentary below provide an indicative analysis of the cash result.Six Months Ended 30 June 2011NoteArisingfromBusinessIn-Force at1 January2011Investmentin NewBusinessduringPeriod£ million £ million £ millionNet annual management fee 1 102.3 5.4 107.7Unwind of surrender penalties 2 (36.8) (1.7) (38.5)Net income from funds under management 65.5 3.7 69.2Margin arising from new business 3 – (0.6) (0.6)Establishment expenses 4 (3.6) (32.6) (36.2)Development expenses 5 – (2.2) (2.2)FSA/FSCS fees 6 (0.3) (2.3) (2.6)Shareholder interest (regulated companies) 7 1.4 – 1.4Shareholder interest (non-regulated companies) 7 1.0 – 1.0Miscellaneous 8 0.8 – 0.8Post-tax cash result 64.8 (34.0) 30.8Total18St. James’s Place plc Registered No. 3183415