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Charles Stanley
Full Year Results - Year ended 31st March 2012
Charles Stanley Group announces that revenue for the year ended 31 March 2012 was £119.6 million compared to the record figure of £125.6 million for the previous year. This has been achieved against the background of the most challenging economic and market conditions. Profit before tax was £8.5 million (2010-11: £13.4 million). The adjusted profit before tax was £12.5 million (2010-11: £17.7 million). This figure for adjusted pre-tax profit excludes the effect of amortisation and another very substantial payment to the Financial Services Compensation Scheme.
At the half-year we reported a marginal improvement in revenue compared with the first half of the previous year, and a 29% decline in profit before tax. Since then economic conditions have retreated back into recession at home, and uncertainty has re-doubled in Europe. This severely affected the propensity of our clients to undertake Stock Exchange transactions, and in January of this year we announced a sharp decline in commission income in our third quarter, to 31 December 2011, compared to the equivalent period of the previous year. This downturn has continued, but less aggressively, into our fourth quarter, from January to March this year.
It is particularly noteworthy that at the same time our fee income has continued to improve significantly, with a 12% increase in our fee income for investment management, and a 7% increase in income from administrative fees. This has gone a long way to mitigate the decline in commission income arising from clients' transactions.
It is also pleasing that we have achieved another significant increase in funds under management and administration especially as this was delivered in hostile market conditions. These rose by 6.0% during the period from £14.50 billion to £15.37 billion. Within this figure the funds under discretionary and advisory management rose by 7.8% from £7.20 billion to £7.76 billion and the funds under discretionary management alone have risen by 9.0% from £4.61 billion to £5.02 billion. This compares with a decline in the FTSE 100 Share Index over the same period of 2.4% and an increase in the APCIMS Balanced Portfolio Index - our principal benchmark - of 0.5%. The increase in funds under management is made up of market performance averaging 0.6% across clients' portfolios, and 7.2% in net incoming funds. Clients' discretionary funds now represent 64.7% of total managed funds, compared to 64.0% at 31 March 2011 and 61.2% at 31 March 2010.
During the year we have continued to attract high quality investment managers and brokers, individually and in teams, with substantial funds under management.
Jobson James Financial Services Limited, which we acquired in May 2011, has settled into the Group well and is now producing a positive contribution to our results.
In November last year we increased the interim dividend for 2011-12 by 10% to 2.75p net per share and we indicated at that time our intention to try and balance the gap between the interim and final dividends. In the light of these results the Directors now recommend an increase in the final dividend of 3.03%, from 8.25p to 8.50p net per share. Taken together with the interim dividend this will represent an increase of 4.67% in the total dividend for the year, at 11.25p (2010-11: 10.75p). The final dividend will be paid on 3 August 2012 to shareholders registered on 29 June 2012.
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