Wealth manager and stockbroker Charles Stanley (CAY) slipped into the red at the half-year stage, reflecting a sharp hike in investment-related costs. Lower trading activity in today’s low-volatility market conditions also dented earnings, with commission income down 16 per cent year on year.
But Charles Stanley's investment programme to upgrade systems and prepare for the digital age is beginning to deliver. Significantly, Charles Stanley Direct - the group's direct-to-client digital investment offering - saw customer numbers grow 23 per cent in the first half to more than 17,500, while the platform's assets under management jumped 17 per cent to £866m. Moreover, the group's discretionary funds under management, where fees are higher, grew 26 per cent year on year to £8.7bn, helping the group's fee income rise nearly 18 per cent.
While investment spending is likely to remain a significant drag for some time, chief executive-elect Paul Abberley - his appointment remains subject to regulatory approval - does at least think the era of sharp cost increases is probably in the past. Mr Abberley also intends to undertake a strategic review, although he insists the group’s commitment to the provision of bespoke investment services "won't change".
Broker Canaccord Genuity expects full-year adjusted EPS of 6.7p (from 22.8p last year), recovering to 17p in 2015-16.
CHARLES STANLEY (CAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 302p | MARKET VALUE: | £138m | |
| TOUCH: | 300-305p | 12-MONTH HIGH: | 522p | LOW: 290p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | NA | |
| NET ASSET VALUE: | 162p* | NET CASH: | £16.9m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 70.0 | 4.9 | 8.5 | 3 |
| 2014 | 72.9 | -4.0 | -7.9 | 3 |
| % change | +4 | - | - | - |
Ex-div:03 Dec Payment:21 Jan *Includes intangible assets of £34m or 75p a share | ||||
