Retail, commercial and property finance all delivered higher profits for Close Brothers (CBG) in the six months to January, and while the financial services group maintained a strict approach to new lending, the loan book still rose by 1.7 per cent.
In the core banking division, adjusted operating profits rose by 13 per cent to £122.7m, boosted by a fall in bad debt after provision releases in property finance. Net interest margins were slightly lower at 8.2 per cent, while adjusted operating expanses grew by 8 per cent to £134m, mainly as a result of investment in further growth.
Market maker Winterflood also delivered a strong performance, albeit against some weak comparatives, as retail interest returned and operating profits more than doubled to £14.4m. Average daily bargains rose by 13 per cent to 57,782, and there were no loss days compared with 13 a year earlier.
On the asset management side, adjusted operating profits grew by 8 per cent to £9.1m, supported by net inflows of £125m, although this was down from a year earlier. Client assets held on an advisory and managed basis totalled £10.2bn, up 3 per cent.
Analysts at Numis are forecasting adjusted pre-tax profits of £252.5m for the year ending July 2017 and EPS of 127p (from £231.9m and 128p in 2016).
| CLOSE BROTHERS (CBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,556p | MARKET VALUE: | £2.34bn | |
| TOUCH: | 1,554-1,557p | 12-MONTH HIGH: | 1,557p | LOW: 975p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 760p | LEVERAGE RATIO: | 9 | |
| Half-year to 31 Jan | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 332 | 109 | 59.7 | 19 |
| 2017 | 378 | 131 | 65.1 | 20 |
| % change | +14 | +21 | +9 | +5 |
Ex-div: 23 Mar Payment: 26 Apr | ||||
