ISH investment manager Charles Stanley has recorded a £3.9m loss in the first half ended 30 September, the firm announced yesterday.
The London-based firm’s loss was substantial when compared to its £4.9m profit in the first half of last year. The listed company also saw its underlying profit before tax plummet 81 per cent on last year to £1.5m.
In better news, the firm managed to grow its funds under management nine per cent year-on-year to £20.2bn and its discretionary assets under management were up 26 per cent to £8.7bn.
Commenting on the results, chairman Sir David Howard said: “It is disappointing to have to report a loss before tax of £3.9 million and a reduced underlying profit before tax of £1.5 million, not least because this does not reflect the good progress achieved in many areas of the group.
“We are investing heavily in a major upgrade of our systems and processes to enhance the proposition to our clients, and in several developments for the future including our award-winning service Charles Stanley Direct. This has impacted on our costs in a period of static markets and revenue.”
Charles Stanley announced in November that Paul Abberley would replace Howard as chief executive once regulatory approval was attained. Howard will become non-executive chairman of the group in order for the firm to be compliant with the latest Capital Requirement Directive of the European Union – CRD IV.
Canaccord Genuity analysts Robin Savage and Arun Melmane maintained their “buy” recommendation, but were cagey on the company’s prospects.
They said: “The outlook is cautious, as the CEO-elect, Paul Abberley, has commenced a strategic review to identify the measures required to enhance the profitability of the group and drive long-term growth, and will present to shareholders in due course.”
Charles Stanley Group – which comprises four principal trading businesses – saw its share price drop 10 per cent in trading yesterday.