UK-based specialist financial services company Close Brothers Group Plc (CBG.L) reported Tuesday a higher profit for its first half mainly on strong performance in Banking division and consistent profitability at Winterflood, despite the absence of prior year’s exceptional income. The company also announced higher dividend.
Looking forward, Close Brothers said its businesses are well placed for the remainder of the year, and that it looks forward with confidence, expecting a good result for the year as a whole.
In Banking, Close Brothers continue to see solid prospects for loan book growth and anticipate a similar performance in the second half, while Asset Management continues to make progress and remains on track. In Securities, Winterflood remains well positioned to benefit from any sustained recovery in market conditions.
In the first half, the company’s operating pre-tax profit grew to 77.3 million pounds from 66.8 million pounds a year ago. Profit attributable to shareholders increased 16 percent year-over-year to 58.8 million pounds or 39.7 pence per share.
Excluding charges for amortisation of intangible assets on acquisition as well as last year’s exceptional income, adjusted operating profit climbed 26 percent to 79.8 million pounds and adjusted basic earnings per share grew 31 percent to 41.8 pence.
Interest income totaled 222.8 million pounds, compared to 200.6 million pounds in the prior year. Net interest income was 146.9 million pounds, higher than 130.6 million pounds reported a year before.
Segment-wise, Banking division performed strongly with a 26 percent increase in adjusted operating profit, reflecting solid loan book growth of 6 percent and improved credit performance.
In Securities, adjusted operating profit declined on a lower contribution from Mako, even as Winterflood remained consistently profitable in difficult trading conditions.
The company said its asset management division has made progress in the first half and is on track on its medium term targets, delivering a 6 percent increase in assets under management to 8.9 billion pounds.
The company’s capital position has remained strong, and its core tier 1 capital ratio as of January 31 was 12.7 percent, compared to 12.8 percent as of July 31, 2012. The capital position is comfortably above current and proposed regulatory requirements and is not expected to be materially affected by Basel lll, Close Brothers said.
Chief Executive Preben Prebensen said, “We have made good progress on our strategic priorities and look forward with confidence.” Further, the company said its board, citing the strong profit growth, has declared an interim dividend of 15 pence, 7 percent higher than last year.
In London, Close Brothers shares are currently trading at 1,077.36 pence, down 7.64 pence or 0.70 percent.
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by RTT Staff Writer
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