Close Brothers  

Close Bros sells specialist fund firm as profits rise

Close Bros sells specialist fund firm as profits rise

Close Brothers has announced the sale of specialist asset management business Olim Investment Managers after reporting a slight increase in pre-tax profit for the year to July 31. 

Close's pre-tax profit for the period rose 4 per cent to £228.5m, enabling it to hike its dividend 7 per cent to 57p per share, but the company did warn of "challenging" conditions, particularly in asset management.

Asset management adjusted profit fell 19 per cent to £14.4m, though a large part of this fall was due to external factors such as the sale of a corporate advice business. Net inflows fell from £700m to £500m nonetheless. 

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Close said it had agreed to sell Olim following its financial year-end to VCT provider Albion Ventures. The business accounted for £900,000 of Close's 2016 profits, and £490m of its £8bn in managed assets. Albion will now take responsibility for a business which encompasses the Close Olim UK Equity Income fund and the Value and Income investment trust.

Elsewhere the company's securities business, Winterflood, produced £19m in operating profit, down 23 per cent but a result which Close said was successful. Trading activity increased in the second half of the period due to the UK vote to leave the EU - a vote which close has, for now, shrugged off.

"To date, we have seen little direct impact on our businesses from the EU referendum result but we continue to monitor developments closely," Close said.

The banking business, which provides the bulk of Close's revenue, reported an adjusted operating profit of £223m, up 7 per cent. Stephen Hodges is now to step down as chief executive of the division after more than three decades, Close said, to be replaced by group chief executive Preben Prebenen.

"Although markets and the economy remain uncertain, our strong balance sheet and established business model give us confidence that we can continue to support our clients, invest in our business and generate returns for our shareholders," Mr Prebensen said.