As with most stockbroking and investment management groups, Charles Stanley experienced contrasting fortunes in the half. For while the private client side of the operation held-up pretty well, revenue from the corporate finance and institutional sales division slid 30.2 per cent.
Trading conditions remained extremely challenging, so a 5.5 per cent fall in clients' funds under management from the March year-end to £13.7bn was a creditable performance, given that the FTSE All-Share index fell by 13.2 per cent over the same period. Crucially, there was a £770m net inflow of new assets, including £246m from the newly acquired Jobson James Financial Services group. And despite the fall in assets under management fee income increased from £29.3m to £31.7m as the average of funds held over the six-month period was up 10 per cent year-on-year. On the corporate finance side, income fell from £1.8m to £1.2m, while commission income shrank from £3.4m to £2.4m. While conditions here are unlikely to improve in the short-term, management pointed out that the securities business contributes just 6 per cent to group turnover.
Peel Hunt expects full-year adjusted pre-tax profits of £15.5m and EPS of 24.7p (2011: £17.7m/28.2p).
| CHARLES STANLEY (CAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £128m | |
| TOUCH: | 277-285p | 12-MONTH HIGH: | 350p | LOW: 240p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 178p* | NET CASH: | £39.6m | |
| Half-year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2010 | 7.29 | 11.5 | 2.5 |
| 2011 | 5.15 | 8.49 | 2.75 |
| % change | -29 | -26 | +10 |
Ex-div: 23 Nov Payment: 22 Dec *Includes intangible assets of £35.9m, or 79p a share | |||
