Stemming losses, strengthening the balance sheet and laying a path for growth were the pillars of Charles Stanley' s (CAY) strategy last year. On the first two points management has delivered, after selling its non-core businesses and restructuring its core investment management division. Funds under management (FUM) and administration were down 3.8 per cent to £20.5bn, as rocky markets took their toll. However, this was almost in line with the 3.5 per cent drop in the WMA balanced index during the period.
Cost-saving measures, including a 7 per cent reduction in headcount, helped stem the reduction in pre-tax profit from its core businesses. This was down £0.2m to £4.2m. Crucially, discretionary funds under management - funds that are managed on a client's behalf - were up £100m to £9.4bn. Management has simplified its rate card for the core investment management business and is looking to grow its intermediary network in order to boost FUM in future.
Thanks to strong growth in pension and institutional business the asset management division increased FUM by 14 per cent to £781m. Meanwhile, online broking platform Charles Stanley Direct grew its client accounts by an impressive 80 per cent, adding £0.2m in FUM to £1.8bn.
Analysts at Peel Hunt expect adjusted EPS of 11.9p for the year to March 2017, compared with 6.9p in FY2016.
CHARLES STANLEY (CAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 301p | MARKET VALUE: | £153m | |
| TOUCH: | 300-303p | 12-MONTH HIGH: | 392p | LOW: 235p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | NA | |
| NET ASSET VALUE: | 168p* | NET CASH: | £48.1m | |
| Year to 31 March | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 120 | 8.5 | 13.1 | 11.25 |
| 2013 | 128 | 9.1 | 14.9 | 11.75 |
| 2014 | 138 | 3.6 | 10.5 | 12.25 |
| 2015 (restated) | 144 | -4.9 | -10.6 | 5 |
| 2016 | 139 | -0.6 | -1.3 | 5 |
| % change | -4 | - | - | - |
Ex-div: 23 Jun Payment: 5 Aug *Includes intangible assets of £25.4m, or 50p a share | ||||
