Charles Stanley braced for profits drop

STOCKBROKER Charles Stanley today warned that the impact of recent financial turbulence will leave half-year profits lower than a year ago.

The group, which has offices in Liverpool, Manchester, Birmingham, Edinburgh, Bath, Bristol and Plymouth among others, 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.

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

Stanley’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 Birmingham-based wealth manager Jobson James and 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 £59.7 million seen in last year’s first half, though interim profits will be below the £7.3 million seen then.

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

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.

Shares in the stockbroker, which at the end of June had over £15 billion of investment funds under its management, fell by 11% on today’s update.