Close Brothers has reported a 16 per cent increase in full-year adjusted operating profit and said its asset management division has made “good progess” in the year to July 31.
The firm, which posted adjusted operating profit of £224.9m, reported an 80 per cent rise in adjusted profit for its asset management division.
The £17.8m figure, up from £9.9m in the previous period, was boosted by a £4.4m benefit from non-recurring private equity income. Excluding this gain, adjusted profits rose by 35 per cent, the group said.
Client assets within the asset management division rose by 11 per cent to £10.8m in the year to July 31.
“We continue to see solid demand for our integrated advice and investment management services and the business remains well positioned to benefit from the ongoing regulatory and demographic changes,” Close said.
The company was downgraded to equal weight by analysts at Barclays last week. The bank said the restructuring of Close’s asset management division ”seems to have stalled”, and suggested further clarity is required over the division’s ability to improve its operating margin above the 15 per cent mark.
Close said today that operating margin for its asset management arm rose from 12 per cent to 15 per cent year-on-year, excluding the private equity income gain.
Brokers at Numis, meanwhile, said this morning the latest figures represent a “good set of numbers”, adding that credit quality within Close’s main banking business “remains excellent”.
“The track record of the bank is worthy of a premium valuation,” Numis added.
Close raised its dividend by 9 per cent to 53.5p. Shares were up 0.5 per cent at £14.89 shortly after the open.
