Charles Stanley’s new executive team is eyeing the sale of a number of its divisions in a bid to focus “entirely” on wealth management.
In a pre-close trading update for the year to March 31, the group said it would seek to sell the principal elements of Charles Stanley Securities, which provides advisory, broking and corporate finance services for smaller and mid-cap UK listed companies, and its financial solutions business which provides employee benefit solutions.
“However, at this stage no assurance can be given that any such transactions will be entered into,” the statement said.
“The group will continue to be an investment led, holistic provider, focussing on bespoke investment advice for which the Charles Stanley brand is known and respected.
“Charles Stanley does intend, however, to be more active along the value chain, especially in relation to the provision of financial planning services (vertical integration), while maintaining a breadth of service offering (horizontal integration).”
The plan has been put forward after a major senior management overhaul which saw Sir David Howard relinquish his position as chief executive in September last year and become non-executive chairman.
The company subsequently hired Paul Abberley as chief executive in December and Ben Money-Coutts as chief financial officer in January and the retirement of Michael Clark as an executive director in March 2015.
It has also hired a head of marketing, chief operating officer, chief risk officer and group compliance officer.
The company also said it would seek to raise extra capital for the business by issuing nearly 4.6m new shares, which it said would “strengthen Charles Stanley’s balance sheet and solvency levels to in excess of 125 per cent of the FCA’s regulatory capital requirement for the group”.
It added it would seek a group operating margin - before the impact of the FSCS levy and other costs - of at least 15 per cent in 2018.
For the year under review, the company said its total funds under management and administration reached a new high of £21.3bn, up 6 per cent from £20.1bn at March 31 last year.
Within that figure, it said, discretionary managed funds increased by 13.4 per cent to £9.3bn up from £8.2bn at March 31 2014.
Mr Abberley said: “Having recently been appointed as chief executive, I have seen first-hand the quality and breadth of our client offering, the expertise of our staff and the scale of our operations, all of which should enable us to take good advantage of the exciting growth opportunities that the wealth management industry provides.
“We have a strategy to modernise and significantly improve the operating performance of the group and the placing will help support the execution of such strategy.”