Strip out exceptional items and operating profits from continuing operations at merchant bank Close Brothers grew 13 per cent in year to £131m - underpinned by a robust performance at the banking business.
Indeed, the banking side grew adjusted operating profit 34 per cent to £106.3m, driven by impressive loan book growth. So, while impairment losses grew from £63.4m to £65.2m, the faster pace of loan book growth pushed the bad debt ratio down from 2.4 per cent to 2.1 per cent. Market maker Winterflood, however, did see operating profits fall 11 per cent to £43.2m and Close is also selling its 49.9 per cent stake in derivatives market maker Mako, which was hit by a £36m impairment charge and saw profits fall from £5.7m to £2.6m. A £15.4m exceptional charge was also booked from restructuring at the asset management division, where losses increased to £8.6m. However, acquisitions nearly doubled funds under management to £6.5bn.
Numis Securities expects to reduce forecasts by around 5 per cent but currently expects full-year pre-tax profit of £154.5m, giving EPS of 77.5p.
| CLOSE BROTHERS (CBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 686p | MARKET VALUE: | £1bn | |
| TOUCH: | 684-686p | 12-MONTH HIGH: | 896p | LOW: 640p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 497p* | |||
| Year to 31 Jul | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2007 | 190.0 | 90.4 | 37 |
| 2008 | 118.0 | 58.3 | 39 |
| 2009 | 88.0 | 43.6 | 39 |
| 2010 | 101.0 | 47.4 | 39 |
| 2011 | 78.5 | 29.6 | 40 |
| % change | -22 | -38 | +3 |
Ex-div: 12 Oct Payment: 22 Nov *Includes intangible assets of £133m, or 91p a share | |||
