Close Brothers share price jumps after snaring Direct Line chairman Mike Biggs

Oliver Gill
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Mike Biggs will take over as chairman at Close Brothers on 1 May

Close Brothers' share price jumped two per cent this morning after naming its new chairman and posting half-year numbers that were broadly in line with expectations.

Direct Line chair Mike Biggs will join the investment firm's board with immediate effect, taking over from Strone Macpherson on 1 May.

The figures

Adjusted operating profit over the first six months of Close Brothers' financial year jumped 21 per cent to £134m.

Earnings per share increased by nine per cent to 65.1p with dividends increasing by five per cent to 20p per share.

Read more: Close Brothers reveals strong first five months

Net interest margin was broadly stable at 8.2 per cent, down 0.1 per cent and the firm's bad debt ratio fell from 0.6 per cent to 0.5 per cent.

Why it's interesting

Close Brothers' half-year figures are broadly in line with market expectations.

Portia Patel, an analyst at Liberum, labelled the numbers "strong" adding the operating profit was 53 per cent of what Close Brothers said it will generate over the full year. Patel had predicted the firm would have made 48 per cent of the annual forecasts by this point.

Mr Biggs

The appointment of Direct Line's Mike Biggs will perk the interest of some investors.

Read more: Close Brothers' share price falls on disappointing results

Biggs was previously the chief exec and chairman of life assurance firm Resolution and finance chief at Aviva.

"We view him as a strong appointment with good technical ability," said Gary Greenwood, an analyst at Shore Capital Markets.

What the company said

Chief executive Preben Prebensen said: "All parts of our business performed well in the period. Our three banking segments, retail finance, commercial finance and property finance, all reported profit growth and strong returns, while both Winterflood and asset management benefited from favourable markets.

"Trading conditions have clearly been favourable in the first half, but as always our priority remains to protect, sustain and invest in our business for the long term."

Our service driven model, focused on specialist markets, has allowed us to support our clients, invest in our business and generate strong returns for shareholders over many years.

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