Broker’s profits hit by global market chaos

The stockbroker warned that half-year profits will be lower than a year ago as a result.

It said its securities division in particular had been hit by the dire markets.

The FTSE 100 Index had its worst quarter for nine years in the three months to September and this affected commissions earned on share trading as big investors shied away from the market.

Corporate finance and advisory fees have also been weak as company deals and new listings have dried up because of the uncertainty.

Despite this the group said that its Leeds office has held up well.

Jono Baker, branch manager of Leeds, said: “From our perspective in Leeds we are extremely positive.

“We are still signing up new clients and are ahead of our targets for Funds Under Management.”

He added that Leeds’s fee income has held steady despite a 15 per cent drop off in the world markets.

“In Leeds we have taken a defensive stance for our clients and held more cash than is normal, however with the market at these levels we are seeing more and more value appearing and are buying good quality companies for our clients at decent levels with good dividend growth forecasts.

“I think we’re well-placed for the future as was borne out in the Charles Stanley trading statement where private client income has held up despite the market corrections.”

The fund manager’s private client and wealth management divisions, which look after and invest individuals’ money, did better and had a “solid” half.

These businesses, which include Beverley-based investment group Garrison, saw investment management fees and financial services revenue ahead of last year.

As a result, group revenues overall will be similar to the £59.7m seen in last year’s first half, though interim profits will be below the £7.3m seen then.

Charles Stanley said it still sees the opportunity for growth year-on-year, but current market conditions make it difficult to see very far ahead.

One of Charles Stanley’s top five institutional investors, who declines to be named, said: “It’s no surprise they’ve been heavily impacted by the market downturn and I’m sure they won’t be the last.”

Another broker said Charles Stanley’s shares could make a good pick for bargain-hunting investors.

“The shares still look relatively inexpensive even though sentiment towards these stocks is quite negative in these markets,” said the broker, who declined to be named.

The group acquired Jobson James in May to boost its presence in the Midlands and director James Rawlingson said that the current uncertainty could also offer up other potential acquisitions to boost its regional network, which he added was key to its ability to access its private client customer base.

The stockbroker had over £15bn of investment funds under its management at the end of June.

Charles Stanley’s proud heritage

Charles Stanley’s Leeds office can trace its roots back over 150 years to a banking partnership in Sheffield.

Jono Baker, branch manager of Leeds, said the branch is proud of its Yorkshire heritage and all of the Leeds team have longstanding connections with the area.

The Leeds branch counts private clients, trustees of charities, solicitors, accountants, intermediaries and institutions among its clients.

It acts as manager for a variety of charitable trusts in Yorkshire and works with both the Brontë Society and Ripon Cathedral.

Charles Stanley opened its current office in Leeds three years ago.