Wealth manager Charles Stanley reported a 27.5 per cent decline in profit as funds under management dragged revenues lower.
The London-listed firm reported revenues fell 4.1 per cent to £81.9m in the first half of the year, reflecting the impact of the pandemic on funds under management and administration (FUMA) and lower interest rates.
It was also hit with a 66 per cent increase in its Financial Services Compensation Scheme levy to £3.5m. IT costs were £1.5m higher in the first half but Charles Stanley said this will be offset by reduced employment costs from the second half onwards.
Charles Stanley’s FUMA averaged £22.1bn, 9.4 per cent lower than in the same period last year, although it picked back up to £22.8bn by the end of the period.
It said it had written off £700,000 from its 2019 Myddleton Croft acquisition due to the fall in FUMA.
Its investment management services arm generated revenues of £72.9m, down slightly from £77m, while Charles Stanley Direct, its online service, maintained revenues at £4.5m.
The wealth manager’s financial planning service remained loss-making but increased revenue by 15.4 per cent to £4.5m, which helped to offset the fall in investment fees.
Chief executive Paul Abberley said: “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.”
“Against this background the low interest rate environment, augmented by central bank asset purchases, should help ensure moderate investment returns in the months ahead.”
Despite the circumstances Charles Stanley said it is “well-positioned to maintain the ongoing economic uncertainties” and has maintained its three pence per share dividend payout.
Shares are trading up 4.5 per cent.