Progress at Arbuthnot (ARBB) isn't quite as spectacular as the reported half-year figures suggest, but it's still impressive enough. Factoring in acquisition-related adjustments and share option costs at banking subsidiary Secure Trust (STB), underlying pre-tax profit jumped 83 per cent year on year to £13.2m.
Of course, that significantly reflects the robust performance at Secure Trust, where underlying pre-tax profit jumped 48 per cent to £15.2m. But the group's Arbuthnot Latham private bank, which is focused on serving wealthier clients, is also doing well. Profit there jumped 70 per cent year on year to £1.7m, as the recruitment of more bankers and wealth managers helped to develop a broader-based business. Latham's loan book jumped 28 per cent to £394m, while investment assets under discretionary management grew 32 per cent to £566m. The group's Dubai office, which was opened last year to serve the large expat British community in the Gulf, should also bolster growth.
Moreover, after having placed just over 1m Secure Trust shares with institutional investors last month - a move that cut its stake in Secure from 67 to 53 per cent - Arbuthnot has raised £25m to support future growth.
Broker Numis Securities expects full-year pre-tax profit of £17.5m, giving EPS of 57.9p (from £15.7m and 50.3p in 2013).
ARBUTHNOT BANKING (ARBB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,205p | MARKET VALUE: | £180m | |
| TOUCH: | 1,204p-1,259p | 12-MONTH HIGH: | 1,500p | LOW: 892p |
| DIVIDEND YIELD: | 2.2%† | PE RATIO: | 16 | |
| NET ASSET VALUE: | 462p* | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2013 | 2.0 | nil | 11 |
| 2014 | 9.5 | 25.3 | 11 |
| % change | +375 | - | - |
Ex-div: 3 Sep Payment: 3 Oct *Includes intangible assets of £12.2m, or 82p a share †Excludes 18p special dividend | |||
