A better economy and healthier financial markets helped specialist bank Close Brothers (CBG) grow adjusted half-year operating profit by 21 per cent year-on-year to £97.2m. However, that barely beat most analysts' expectations, so significant upgrades don't look likely. JP Morgan Cazenove, for instance, has kept its estimates unchanged and expects full-year EPS of 100p (from 83.1p in 2013) and net tangible assets (NTA) of 534p.
Economic recovery is proving especially beneficial for the banking division, which is focused on car finance, property-related credit and secured SME lending and generates over 80 per cent of group operating profit. Its loan book grew 11 per cent to £4.89bn, yet the bad-debt charge actually fell 12 per cent to £22.7m. That backdrop of improving credit quality means that the bad-debt ratio (non-performing loans as a proportion of assets) now stands at a mere 1 per cent.
Meanwhile, the Winterflood Securities unit is benefiting from such factors as a stronger IPO pipeline and improved trading levels in the small-cap and Aim-traded sectors. The unit's adjusted operating profit soared 58 per cent year-on-year to £16.6m. Better conditions in financial markets, meanwhile, helped deliver £190m of net fund flows into the asset management business, pushing funds under management up 2 per cent to £9.3bn.
CLOSE BROTHERS (CBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,494p | MARKET VALUE: | £2.22bn | |
| TOUCH: | 1,492-1,494p | 12-MONTH HIGH: | 1,496p | LOW: 898p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 580p | |||
| Half-year to 31 Jan | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2013 | 78 | 40.8 | 15 |
| 2014 | 94.8 | 49.2 | 16.5 |
| % change | +22 | +21 | +10 |
Ex-div: 19 Mar Payment: 23 Apr | |||
