A strong performance from the banking division and a return to profitability in asset management helped to lift adjusted operating profit by 24 per cent to £166.5m at financial group, Close Brothers (CBG). Accordingly, the return on equity grew from 12.5 per cent to 15.8 per cent, while the group's core tier-1 capital ratio rose from 12.8 per cent to 13.3 per cent.
The banking division continued to focus on making secured, short-term, small ticket loans, and while the loan book increased by 13 per cent to £4.6bn, the bad debt ratio continued to improve from 1.5 per cent to 1.2 per cent, and adjusted operating profit rose 17 per cent to £157.8m. Trading on the securities side recovered from a poor start to deliver a 5 per cent increase in profits to £25.7m, thanks to a six-fold increase in profit at German unit, Seydler. And asset management showed the benefits of a restructuring, turning a £4.3m loss into a profit of £4m. A solid investment performance lifted assets under management from £8.3bn to £9.1bn, too, although there was a small net funds outflow of £212m.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits of £195.3m for the coming year and EPS of 97.3p (from £166.5m and 83.1p in 2013).
| CLOSE BROTHERS (CBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,167p | MARKET VALUE: | £1.72bn | |
| TOUCH: | 1,167-1,168p | 12-MONTH HIGH: | 1,185p | LOW: 815p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 566p | |||
| Year to 31 Jul | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2009 | 88.0 | 43.6 | 39.0 |
| 2010 | 101 | 47.4 | 39.0 |
| 2011 | 78.5 | 29.6 | 40.0 |
| 2012 | 135 | 68.6 | 41.5 |
| 2013 | 163 | 81.6 | 44.5 |
| % change | +21 | +19 | +7 |
Ex-div: 16 Oct Payment: 26 Nov | |||
