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Summary
- Group delivered a resilient performance in the face of exceptional conditions with the global COVID-19 pandemic. It is in a strong position to deal with ongoing uncertainty and remains focused on business improvement and growth.
Financial highlights
- Revenue decreased by 4.1% to £81.9 million (H1 2020: £85.4 million), reflecting the
impact of COVID-19 on funds under management and administration (FuMA) and
lower interest rates - Revenue margin increased to 74.3 bps (H1 2020: 69.9 bps)
- FuMA averaged £22.1 billion, 9.4% lower than in H1 2020
- by the end of H1 2021, FuMA was up 12.9% to £22.8bn, in line with market
recovery
- higher-value managed funds comprised 59.6% of FuMA (FY 2020: 59.4%) - Underlying1 profit before tax reduced by 27.5% to £6.6 million (H1 2020: £9.1 million),
reflecting lower revenues and higher FSCS Levy costs / Reported profit before tax of
£4.8 million (H1 2020: £8.1 million) - Underlying1 profit margin2 decreased to 8.1% (H1 2020: 11.2%)
- Underlying1 EPS of 9.94p (H1 2020: 15.04p) / Reported EPS of 7.06p (H1 2020:
13.36p) - Restructuring costs of £0.6m (H1 2020: £1.2m)
- Balance sheet remains strong:
- cash balances up 4.1% to £92.1 million (FY 2020: £88.5 million)
- net assets of £115.4 million (FY 2020: £116.5 million)
- regulatory capital solvency ratio of 174% (H1 2020: 206% and FY 2020: 189%),
well above risk appetite
• Maintained interim dividend at 3.0 pence per share (H1 2020: 3.0 pence per share)
Operational
- Continued progress with the transformation programme launched a year ago to
support profitable growth and an integrated business model
- focus is on IT, front and middle offices
- some delays caused by lockdown
- £1.2 million of realised cost savings achieved to date and expecting annualised
savings of £2.5 million for FY 2021
- on track for expected annualised savings of £4.5 million during FY 2022 and
into FY 2023 - Investment Management Services generated revenues of £72.9 million (H1 2020:
£77.0 million) - Charles Stanley Direct, the online execution-only service, maintained revenues at £4.5
million (H1 2020: £4.5 million) - Financial Planning increased revenue by 15.4% to £4.5 million (H1 2020: £3.9 million)
- Continued improvement of coverage with national independent networks as well as
the professionals’ market
Outlook
- The Group is well-positioned to navigate the ongoing economic uncertainties
underpinned by a strong balance sheet, no debt and robust level of regulatory capital - The Board is positive about long-term prospects and remains focused on
improvements and growth initiatives
Paul Abberley, Chief Executive Officer, commented:
“These are resilient results in the face of the exceptionally difficult trading conditions caused by the COVID-19 pandemic, with revenue and profits at encouraging levels. Charles Stanley reacted rapidly and effectively to the unique challenges. We maintained our normal high level of service to clients while ensuring staff safety. Although the effects of the pandemic will be with us for some time, Charles Stanley remains well-positioned. We have a strong balance sheet, with no debt and good cash flows. This will allow us to continue to provide clients with an excellent service and to make further progress with our strategic objectives.”
