24th Sep 2013 08:15
LONDON (Alliance News) - Specialist finance company Close Brothers PLC Tuesday said its pretax operating profit climbed after reaping the benefits of increased interest income, as well making more on commission and fees.
Close Brothers, which operates three business divisions, Banking, Securities and Asset Management, said it made a GBP163.1 million pretax operating profit for the year to July 31, compared with GBP134.9 million the previous year. The profit increase came as a result of strong performances across Close Bros' three business divisions.
This includes exceptional income of GBP1.6 million, less than last year's GBP5.6 million, as well as a GBP5 million loss on amortisation, GBP100,000 higher than last year. When combined, Close Brothers' interest income and fee and commission income increased 11% to GBP639.2 million.
"We continue to see good opportunities for growth in the Banking division and Securities remains well placed for any sustained improvement in trading conditions. In Asset Management we expect continued progress towards our medium-term targets," the company said in a statement.
Close Brothers' Asset Management business saw its assets under management increase 9% to GBP9.1 billion, compared with GBP8.3 billion this time last year, with market movements cited. The figure is up GBP100 million on July 24. The division completed a restructuring directive and is focused on wealth management for the UK private client market. The asset management arm returned to profitability, as predicted in the July 24 trading update.
The Banking business, which provides specialist lending to small and medium-sized businesses, increased its loan book by 13% to GBP4.6 billion and although net interest margins dropped slightly, its bad debt ratio saw an improvement of three percentage points to 1.2%. Overall, the division's adjusted operating profit increased 17% to GBP157.8 million.
Close Brothers said its Securities division remained profitable in spite of difficult trading conditions, with adjusted operating profit increasing 5% to GBP25.7 million, largely down to a strong performance from its market-making to retail brokers Winterflood brand.
The company's full year dividend is at 44.5 pence per share up 8% on the 41.5p in 2012.
Close Brothers shares were Tuesday quoted at 1,150 pence, up 17 pence, or 1.5%.
By Samuel Agini; [email protected]; @samuelagini
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