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Charles Stanley Group PLC announces its interim results

Interim results for the six months ended 30 September 2019

by
Charles Stanley

21.11.2019

Charles Stanley Group PLC (‘the Group’) or (‘Charles Stanley’) today announces its interim results for the six months ended 30 September 2019.

Read the full announcement 
Read the Report

Financial highlights 
  • Funds under Management and Administration (“FuMA”) increased by 2.1% to £24.6 billion, with discretionary funds up by 6.1% to £13.9 billion (H1 2019: £13.1 billion)
  • Revenue growth in all three divisions contributed to 9.9% increase to £85.4 million (H1 2019: £77.7 million)
  • Revenue margin up to 69.9bps (H1 2019: 62.7 bps) – benefiting from comprehensive repricing project completed in March 2019 and shift towards higher margin services
  • Expenditure remained well controlled at £75.4 million, up 4.1% - mainly reflecting variable staff remuneration (H1 2019: £72.4 million)
  • Restructuring costs of £1.2 million (H1 2019: £nil) – expected to yield £0.8 million in annualised savings. These costs are part of management’s Transformation Programme, which is a three year project expected to cost c.£9.5 million in total and yield annualised benefits of c.£4.5 million
  • Underlying1 profit before tax increased 71.9% to £9.8 million (H1 2019: £5.7 million)
  • Underlying1 profit margin2 improved to 11.2% (H1 2019: 9.3%)
  • Reported profit before tax of £8.1 million (H1 2019: £5.1 million)
  • Regulatory capital resources are strong at £81.1 million (H1 2019: £75.5 million and FY 2019: £82.9 million)

Operational highlights

  • Transformation initiatives are focused on improving sales and operational efficiencies and remain on track
  • Overall sales strategy and targets have been refocused
  • Operating model is in the process of restructuring to drive efficiencies;
  • established single Middle Office function in Investment Management Services in early Q2, which will  provide more efficient and effective support to business units
  • IT infrastructure is being reorganised
  • Front Office productivity is being improved across the Group’s investment management teams
  • Acquisition of Myddleton Croft Limited in August 2019 has enhanced Group’s presence in Yorkshire and the North East

Outlook

  • Management expects further progress with initiatives in H2 and is confident that its strategy will support a sustainable improvement in underlying profitability

Paul Abberley, Chief Executive Officer, commented:

“This is an encouraging set of results. The increase in profits demonstrates that the hard work of recent years is now bearing fruit. The comprehensive repricing project, completed last March, and our continued shift towards higher margin services have been the key drivers of profit growth.  
The business transformation programme that is underway is focused on improving the Group’s distribution capability and streamlining operational processes. In the short term, it will temper profitability given the costs, but will establish a stronger platform for long-term, sustainable growth.  
We are confident of further progress in the second half.”

1 Underlying profit before tax and earnings per share excludes exceptional restructuring costs and the amortisation of client lists.
 
2This underlying pre-tax margin is based on the underlying profit before tax excluding the charge in respect of non-cash share options awarded to certain investment management teams under revised remuneration arrangements settled in 2017, expressed as a percentage of underlying revenues.

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