Charles Stanley's (CAY) shares rose nearly 8 per cent on the back of these figures after the stock broker and investment manager delivered a 42.9 per cent increase in underlying half-year pre-tax profits to £8m. Funds under management grew 18.6 per cent year-on-year, too, to £18.5bn - negative market movements did trim funds by 0.2 per cent, but this was more than offset by a £500m net client fund inflows. Crucially, discretionary funds under management, where fees are higher, grew from £6.4bn to £6.9bn.
A shift by clients into either discretionary funds, or non-advised dealing only services, meant that fee income rose 12.8 per cent to £41.5m, while commission income grew 24.4 per cent. That was more than enough to compensate for a 15.7 per cent rise in administrative expenses to £65.4m - which reflected increased profit share payments and the recruitment of additional staff in the financial planning area. Revenue from financial planning and wealth management, meanwhile, rose 23.8 per cent to £2.6m. Although at pension operation, EBS Management - and despite an increase in the number of self-invested pension plans (Sipps) under administration to 6,270 - low interest rates squeezed margins and left revenue flat at £1.1m.
Broker Canaccord Genuity expects full-year adjusted pre-tax profit of £16m, giving EPS of 26.6p (from £13.5m/22.4p in 2013).
| CHARLES STANLEY (CAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 490p | MARKET VALUE: | £221m | |
| TOUCH: | 482-495p | 12-MONTH HIGH: | 490p | LOW: 290p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 182p* | NET CASH: | £25.4m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | |
|---|---|---|---|---|
| 2012 | 59.7 | 3.40 | 6.00 | 2.75 |
| 2013 | 70.0 | 4.87 | 8.52 | 3.00 |
| % change | +17 | +43 | +42 | +9 |
Ex-div: 20 Nov Payment: 13 Dec *Includes intangible assets of £33m, or 74p a share | ||||
