Close Brothers make bumper half year profit

FINANCIAL services group Close Brothers Group yesterday beat estimates to report a 26 per cent increase in profits for the six months ending in January.

The company, which started life in 1878 making US farm loans, saw interim adjusted operating profit increase to £79.8m, up from £63.2m during the same time last year.

“The group achieved a good result in the period”, chief executive Preben Prebensen said.

“We have made good progress on our strategic priorities and look forward with confidence.”

The rise was driven by a stellar performance from the company’s banking operations, which makes loans to small and medium enterprises.

The division saw a 26 per cent increase in adjusted operating profit on the back of loan book growth of six per cent and an improved bad debt ratio of 1.2 per cent.

Elsewhere, its asset management unit managed to swing back into profit and boost its revenue margin from 73 basis points to 84 basis points. This helped reverse a £2.6m loss last year to deliver adjusted operating profits of £1.1m.

There was also a chink of light for its securities division Winterflood Securities despite lower year on year profits.

Adjusted operating profits came in at £7.4m for the six months between July 2012 and January 2013 compared to £8.4m in the same period last year but an upturn in equity markets could feed into better results later this year.

Canaccord Genuity analyst Robin Savage said: “As the equity market recovers, Winterfloods’ revenues and profits should recover.”