Charles Stanley’s (CAY) management is cautious on the investment market outlook. The threat of trade wars and a poorly-executed Brexit, along with the end of quantitative easing, could result in greater volatility and potentially dampen investor appetite and returns, says chief executive Paul Abberley. For the wealth manager, which charges a fee based on the percentage of a client’s portfolio size, that could pose a risk to future revenue.
Discretionary funds increased by 8 per cent to £12.3bn last year, while advisory managed assets continued to decline, down by a quarter to £1.8bn. However, overall net inflows were just £0.2bn, which together with £0.4bn in negative market movements, meant funds under management and administration declined marginally to £23.8bn. While revenue increased 6 per cent at the core investment management business, higher staff and remuneration costs pushed up operating expenses, resulting in a 9 per cent reduction in divisional operating profits.
Analysts at Peel Hunt expect adjusted pre-tax profits of £13.7m for the year March 2019, giving EPS of 20.8p (up from £10.9m and 16.1p in 2018).
| CHARLES STANLEY (CAY) | ||||
| ORD PRICE: | 336p | MARKET VALUE: | £170m | |
| TOUCH: | 326-340p | 12-MONTH HIGH: | 434p | LOW: 334p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 193p* | NET CASH: | £66m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 138 | 3.6 | 10.5 | 12.25 |
| 2015 | 144 | -4.9 | -10.6 | 5 |
| 2016 | 139 | -0.7 | -1.3 | 5 |
| 2017 | 142 | 8.8 | 12.4 | 6 |
| 2018 | 151 | 11.4 | 17.2 | 8 |
| % change | +6 | +30 | +40 | +33 |
| Ex-div: | 28 Jun | |||
| Payment: | 31 Jul | |||
| *Includes intangible assets of £19m, or 38p a share | ||||
