Charles Stanley results beat expectations
Profits at stockbroker Charles Stanley soared 29.2 per cent in the year to March, raising its earnings per share by 34 per cent.
Pre-tax profit rose to £17.7m from £13.7m in 2010, while earnings per share of 28.4p were up from 21.2p in 2010, it said in its full-year results.
However, it was hit with a £2.6m levy from the Financial Services Compensation Scheme as the body sought to recover losses to investors incurred when wealth managers failed in the past year – most notably Keydata.
Chairman Sir David Howard slammed the “unfairness” of the scheme in his statement and called for better regulation of misbehaving firms and the products they sell.
“These appear to be rogue businesses, operating in areas of the industry unrelated to us, marketing products or services that should have been stopped at inception,” he said.
“We join with the many companies, professional bodies and trade associations that are calling for a high-level enquiry into how such a thing, on such a scale, could possibly have been allowed to happen.”
However, he praised the broker’s performance and outlined an optimistic outlook.
“The future remains as uncertain as ever. But we are well placed to move forward. So my guarded feeling of confidence about the outlook remains undaunted.”
Investors poured fresh funds into its investment management business, growing assets under management up 13 per cent to £14.5bn from £12.8bn in 2010.
Its fee income also rose 20.8 per cent, to £50m from £41.4m, as investment management fees increased by 18.9 per cent to £27m.
Peel Hunt analyst Stuart Duncan said the results beat expectations by seven per cent.
Revenues were up nine per cent to £125.6m and it has hiked its dividend by 13.8 per cent to 10.75p.
Cash reserves in the year grew to £45.5m from £36.6m in March 2010, which it said would allow it to fund acquisitions.
Charles Stanley bought Birmingham-based wealth manager Jobson James last month for a total £2.25m, dependent on the smaller company meeting a set of performance targets.