St James's Place posts FY profit beat, ups dividend

* FY cash profits up 24 pct to 173.8 mln stg

* Ups final dividend by 50 pct, beats expected 40 pct rise

* Aims to pay out 75 pct of cash profits in future

* Shares (Frankfurt: DI6.F - news) up 4.3 pct to record high, lead FTSE 100 gainers (Adds shares, statement, analyst)

By Simon Jessop

LONDON, Feb 25 (Reuters) - Strong asset growth helped British wealth manager St James's Place beat full-year cash profit forecasts on Wednesday, underpinning a surprise rise in its dividend and boosting its shares.

St James's Place has benefited from government reforms allowing individuals more tax-free savings, at a time of low-interest rates that discourage savers from leaving money in bank accounts or other money market instruments.

The group, which also provides a range of services through its Partnership network of financial advisors, said profits rose 24 percent to 173.8 million pounds ($269.42 million) from 139.9 million.

That was driven in part by a 20 percent increase in net new funds under management to take the total to 52 billion pounds, from 44.3 billion, as reported in late January.

The jump in profits enabled the company to increase its final dividend by 50 percent to 14.37 pence, more than the 40 percent increase it had flagged to the market.

"This gives a full year payout of 70 percent of the underlying cash and in future years we expect our dividend payout ratio to be broadly in line with 75 percent of the cash result," Chief Executive David Bellamy said in a statement.

Shares in St James's Place were up 4.3 percent to a record high 933.5 pence in early trade, leading gainers on the blue-chip FTSE 100.

Calling the results "excellent", Panmure analyst Barrie Cornes said profits were well ahead of forecasts and he maintained his "buy" recommendation, upping his target price to 1,057p from 977p.

While the dividend yield on the stock is currently 2.6 percent, said analysts at JPMorgan (LSE: JPIU.L - news) , the projected increase in the payout ratio could see this rise to between 3.7 percent and 3.8 percent in 2016.

Alongside its financials, St James's Place also said its planned new banking service tie-up with Metro Bank was set to go live in April.

($1 = 0.6451 British Pounds) (Reporting by Simon Jessop, editing by Sinead Cruise and Jason Neely)