Wealth manager and stockbroker Charles Stanley (CAY) suffered a "year of significant cost" after spending heavily on investment and acquisitions. Adjusted pre-tax profit was flat in the year to end-March, at £13.5m, after underlying costs jumped nearly 19 per cent.
Establishing an office in Leicester sliced £2.4m from profits. Unfortunately, it has also left Charles Stanley embroiled in a legal row with rival Brewin Dolphin (BRW) over the staff that quit Brewin to set up the office. Brewin has issued a writ claiming breach of contract and seeking compensation. Other costs include December’s acquisition of Evercore Pan Asset Capital Management, which came with over £500m of pension fund assets, while £1.3m was invested in direct-to-client web service Charles Stanley Direct.
Charles Stanley did make solid operational progress, however, with total funds under management rising 14 per cent in the period to £20.1bn. That's all the more impressive because the FTSE100 index rose just 2.9 per cent. Significantly, discretionary funds - where fees are higher - soared 28 per cent to £8.2bn, while total revenue from higher-margin managed business grew 20 per cent.
Partly reflecting ongoing regulatory costs, broker Peel Hunt has reduced its adjusted EPS estimate for fiscal 2015 by 8 per cent to 28.2p (from 22.4p in 2014).
CHARLES STANLEY (CAY) | ||||
---|---|---|---|---|
ORD PRICE: | 426p | MARKET VALUE: | £194m | |
TOUCH: | 422-430p | 12-MONTH HIGH: | 522p | LOW: 398p |
DIVIDEND YIELD: | 2.9% | PE RATIO: | 41 | |
NET ASSET VALUE: | 183p* | NET CASH: | £36.4m |
Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2010 | 115 | 10.3 | 15.4 | 9.45 |
2011 | 126 | 13.4 | 21.4 | 10.75 |
2012 | 120 | 8,5 | 13.1 | 11.25 |
2013 | 128 | 9.1 | 14.9 | 11.75 |
2014 | 149 | 6.1 | 10.5 | 12.25 |
% change | +16 | -33 | -30 | +4 |
Ex-div: 9 Jul Payment: 8 Aug *Includes intangible assets of £35.3m, or 77p a share |