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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Charles Stanley Group Plc | LSE:CAY | London | Ordinary Share | GB0006556046 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 512.50 | 510.00 | 515.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:8972R Charles Stanley Group PLC 11 November 2003 11 November 2003 RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003 * Turnover increased by 11.8% to # 30.1 million * Profit before tax and goodwill #3.0 million (September 2002: #1.5 million) * Profit before tax #2.4 million (September 2002: #1.0 million) * Earnings per share 3.10p (September 2002: 1.51p) * Dividend 1.00p (September 2002: 1.00p) * Acquisition of EBS (Employee Benefit Services) * Acquisition of part of Durlacher's private client stockbroking operation * Acquisition of "Nothing Ventured" online Sharedealing service Charles Stanley, one of the largest independent private client stockbrokers in the UK, is pleased to announce that for the six months ended 30th September 2003 profit before tax and amortisation has doubled from #1.54 million (2002) to #3.03 million. Turnover for the period has risen by 11.8% to #30.15 million (2002: #26.98 million). Profit before tax, but after amortisation and the sale of investments, was #2.44 million (2002: #1.04 million). The improvement in turnover corresponds to an increase of 11.35% in the volume of stock exchange transactions undertaken by the company in the period. At the same time, fixed costs have remained under tight control, resulting in a doubling of the profit. We propose maintaining the dividend at 1.00p net per share. Markets continue to be difficult, and although the latest results represent a significant improvement the directors consider that trading volumes remain below the long-term trend-line. Our strategy, as described in previous statements, has been to take advantage of these weak conditions to continue to build the business. The latest results illustrate the success of this strategy. Our acquisitions during this prolonged downturn in the market have integrated very well into Charles Stanley, and are now bearing fruit. Acquisitions During the latest six months we have made a number of further acquisitions. Often these consist of small teams or individual stockbrokers who fit neatly into our existing operations. Two acquisitions are of particular note. First is the acquisition of the well-known leading-edge firm of pension administrators and pension advisers, EBS Management PLC. For some years we have been steadily building a specialist financial planning capability to complement the wealth management available to our stockbroking clients, and to offer skilled services in areas of specialisation such as employee benefit schemes. This process began in February 2001 with the purchase of Forester MacLean Benefit Consultants Limited, followed now by the acquisition of EBS Management and its subsidiary companies. EBS provides services to some 500 Small Self-Administered Schemes ("SSASs"), 850 Self Invested Personal Pension Schemes ("SIPPs") and 35 Exempt Property Unit Trusts ("EPUTs"), with total assets exceeding #700 million, generating revenues of about #1.2 million p.a. We are particularly delighted to have been joined by the founder of EBS, Mr Dryden Gilling-Smith, the well-known expert and commentator who has done so much to popularise personal pension provision. Secondly, in September we acquired a significant part of the private client stockbroking division of Durlacher PLC. More recently, in October, just after the end of the half-year, we acquired the internet share-trading business of Durlacher PLC, which operated under the name of "Nothing Ventured". I have referred in previous statements to our policy of advancing the growth of the group on all fronts, in an evenly balanced way. For example, at this time last year, and again at the year-end, I mentioned our success in attracting a significant corporate finance and corporate broking team to our London office, where they have subsequently enjoyed an excellent 12 months. In the same way we have been looking to expand our internet share-trading services. In February last year these grew to roughly double their previous size when, as a result of acquiring the prestigious business of Torrie & Co in Edinburgh, we were able to merge its well-known FasTrade internet service with our own pioneering Xest operation. This now operates as a popular site under the FasTrade label. The acquisition of the Nothing Ventured business offers significant further improvements to our FasTrade clients, in particular in the range and quality of information and research available on the website. We are already seeing a significant increase in the volume of our internet trading as a result of this latest development. Operations All parts of the business performed well during the half-year. For example, we now hold very nearly #900 million for clients in Charles Stanley PEPs and ISAs. This is a new record for us, and has been achieved in the face of FTSE share indices which stand substantially below their peak - a benchmark to which PEP and ISA values are closely linked. The revenue of our Financial Planning division more than doubled in the six months, to #533,000, and should more than double again with the acquisition of EBS Management. Despite an almost complete dearth of corporate finance activity in the market in the latest period, our Corporate Finance division has continued to attract important new clients. We now act for 40 companies. In the first seven months of the current year (that is, up to the end of October 2003) the fee income of the Corporate Finance division has exceeded #2.38 million, which was the figure for the whole of last year, 2002-03. Our run of awards has continued, recognising the quality of the service that we provide to our clients. The latest is the award from Shares Magazine for the Best Discretionary Stockbroker of 2003. Fee income now represents 31% of total income. In the light of our programme of steady improvement in the range of services offered to our investment management clients we are moving more strongly to fee-based remuneration. This is a major exercise which is progressing well. The ratio between fee and commission income will fluctuate over time, as commission income is more volatile, but we are actively planning for a steady increase in the medium-term trend of the percentage that fees contribute to our total revenue. In my last report to shareholders (in June 2003) I explained our view that no provision needed to be made in respect of advice given on split capital investment trust shares. There has been no significant change in the information which I gave at that time, and our view remains the same. Dividend It is proposed to pay a dividend of 1.00p per share, net of tax, on 17th December 2003 to shareholders registered on 21st November 2003. Outlook Market conditions remain well below their best, but the underlying tone has been rather more "bullish" than at any time in the three-year recessionary period of 2000, 2001 and 2002. Recent months have seen a reasonably persistent upward trend in business levels, and this has been maintained into the opening weeks of our second half-year. But there are many uncertainties. While the UK economy is growing again at somewhere near its long-term trend, the weakness of the continental economies is bound to affect export growth. The proportion of empty commercial property in the City is close to record levels, and this is very tangible evidence of an economy working well below capacity. The diversion of resources by the government from the private to the public sector (whose productivity rate has actually been falling) is worrying for the future. And we think that the combined effect of a probable increase in personal taxation to pay for this, and of the steady expansion in regulations, could place further strains on the financial services sector. Views are divided as to whether the world is now moving decisively out of the long recession. Certainly the pace of change will vary from region to region. China, and now Japan, are becoming significant drivers of world growth. Europe, by contrast, seems destined to languish under the weight of self-imposed structural and institutional barriers, and attempts to dismantle these look unlikely to succeed. Nevertheless the UK economy seems to be gathering speed. Against this background one has to say that the broader outlook, while more encouraging than in the recent past, remains unclear. Within your company, though, we are seeing the benefit of recent acquisitions, and we think that the improvement in market conditions is fairly soundly based. Given the good start to the second six months we take a reasonably positive view of the outlook for the remainder of the current year. Sir David Howard Bt. Chairman 11 November 2003 Consolidated Profit and Loss Account Six months ended 30 September 2003 Half-year to Half-year to Year to 30.9.03 30.9.02 31.3.03 #'000 #'000 #'000 Notes TURNOVER 2 Continuing operations 29,963 25,216 47,553 Acquisitions 186 1,760 3,511 30,149 26,976 51,064 Operating expenses (28,224) (26,413) (51,058) OPERATING PROFIT/(LOSS) Continuing operations 1,951 545 350 Acquisitions (26) 18 (344) 1,925 563 6 Profit/(loss) on sale of investments - continuing operations 32 (19) (50) 1,957 544 (44) Interest receivable 512 559 1,142 Interest payable 3 (31) (67) (120) Profit on ordinary activities before goodwill amortisation and profit on sale of investments 3,033 1,542 1,997 Goodwill amortisation (627) (487) (969) 2,406 1,055 1,028 Profit/(loss) on sale of investments 32 (19) (50) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,438 1,036 978 Tax on profit on ordinary activities 4 (1,130) (400) (534) PROFIT FOR THE PERIOD 1,308 636 444 Dividends 5 (421) (421) (1,897) TRANSFER TO/(FROM) RESERVES 887 215 (1,453) Earnings per Share Half-year to Half-year to Year to Notes 30.9.03 30.9.02 31.3.03 Basic 6 3.10p 1.51p 1.05p Diluted 6 2.97p 1.51p 1.02p Excluding goodwill Basic 6 4.59p 2.66p 3.35p Diluted 6 4.39p 2.66p 3.25p Statement of Total Recognised Gains and Losses #'000 #'000 #'000 Profit for the period 1,308 636 444 Unrealised gains/(losses) on investments 472 (847) (1, 241) Total recognised gains and losses relating to the period 1,780 (211) (797) Note of Historical Cost Profits and Losses #'000 #'000 #'000 Reported profit on ordinary activities before taxation 2,438 1,036 978 Realisation of investment revaluation gains of previous years 4 - (27) Historical cost profit on ordinary activities before taxation 2,442 1,036 951 Historical cost profit/(loss) for the year after taxation and dividends 891 215 (1,480) Consolidated Balance Sheet 30 September 2003 30.9.03 30.9.02 31.3.03 #'000 #'000 #'000 Notes FIXED ASSETS Intangible - Goodwill 10,979 8,439 8,191 Tangible 5,328 5,766 5,227 Investments 3,255 3,118 2,732 19,562 17,323 16,150 CURRENT ASSETS Debtors 208,814 134,450 178,896 Listed investments 419 105 322 Cash at bank and in hand 28,666 27,977 26,948 237,899 162,532 206,166 CREDITORS amounts falling due within one year (216,826) (139,432) (182,931) NET CURRENT ASSETS 21,073 23,100 23,235 TOTAL ASSETS LESS CURRENT LIABILITIES 40,635 40,423 39,385 CREDITORS: amounts falling due after more than one year (1,046) (131) (1,155) Minority Interests (44) (44) (44) NET ASSETS 39,545 40,248 38,186 CAPITAL AND RESERVES Called up share capital 7 10,537 10,537 10,537 Revaluation reserve 2,568 2,490 2,096 Profit and loss account 26,440 27,221 25,553 EQUITY SHAREHOLDERS' FUNDS 39,545 40,248 38,186 Consolidated Cash Flow Statement Six months ended 30 September 2003 Half-year to Half-year to Year to 30.9.03 30.09.02 31.3.03 #'000 #'000 #'000 Notes Cash flow from operating activities 8 4,941 5,595 6,972 Returns on investments and servicing of finance 482 487 1,027 Taxation (317) (863) (1,486) Capital expenditure and financial investment (586) (799) (1,278) Acquisitions (1054) (160) 106 Equity dividends paid (1476) (1,475) (1,897) Cash inflow before financing 1,990 2,785 3,444 Financing Decrease in debt (272) (956) (2,644) Increase in cash in the period 1,718 1,829 800 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Increase in cash in the period 1,718 1,829 800 Cash outflow from change in debt and lease financing 272 956 2,644 1,990 2,785 3,444 New finance leases (571) (43) (43) Movement in net funds in the period 1,419 2,742 3,401 Net funds at start of period 26,623 23,222 23,222 Net funds at close of period 28,042 25,964 26,623 Notes to the Financial Statements 1 BASIS OF PREPARATION The interim results have been prepared on a basis consistent with the accounting policies set out on pages 29 and 30 of Charles Stanley Group PLC's Annual Report and Financial Statements for the year ended 31 March 2003. The unaudited interim financial statements should therefore be read in conjunction with the 2003 Annual Report and Financial Statements. The financial information as set out in this report is unaudited and does not comprise statutory accounts for the purposes of Section 240 of the Companies Act 1985. The Auditors have carried out a review and their report is set out below. The comparative figures for the year ended 31 March 2003 have been taken from, but do not constitute, the Company's statutory financial statements for that financial year. Those financial statements have been reported on by the Company's Auditors and delivered to the Registrar of Companies. Their report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. A copy of this statement is being forwarded to all shareholders and will be available for members of the public at the Company's registered office, 25 Luke Street, London EC2A 4AR. 2 TURNOVER 30 Sep 2003 30 Sep 2002 31 Mar 2003 #'000 #'000 #'000 Commission 20,808 17,919 33,862 Investment management fees 7,696 7,285 14,817 Corporate finance fees 1,645 1,772 2,385 30,149 26,976 51,064 3 INTEREST PAYABLE On bank loans and overdrafts 15 21 35 On convertible debt - 28 47 Finance lease interest 16 18 38 31 67 120 4 TAX ON PROFIT ON ORDINARY ACTIVITIES Current period: UK corporation tax at 30% 987 446 585 Adjustments in respect of previous periods 143 (46) (51) 1,130 400 534 5 DIVIDENDS Proposed interim of 1.00p per share (2002: 1.00p) 421 421 421 Final of 3.50p per share - - 1,476 421 421 1,897 Notes to the Financial Statements (continued) 6 EARNINGS PER SHARE 30 Sep 2003 30 Sep 2002 31 Mar 2003 No. No. No. Weighted average number of shares in issue in the period 42,149,378 42,149,378 42,149,378 Weighted average number of options outstanding 1,943,500 - 1,371,565 44,092,878 42,147,378 43,520,943 #'000 #'000 #'000 Profit for the year before goodwill 1,935 1,123 1,413 Goodwill amortisation (627) (487) (969) Profit for the period 1,308 636 444 7 CALLED UP SHARE CAPITAL 30 Sep 2003 30 Sep 2002 31 Mar 2003 #'000 #'000 #'000 Authorised: 80,000,000 ordinary shares of 25p each 20,000 20,000 20,000 Allotted and fully paid: 42,149,378 ordinary shares of 25p each 10,537 10,537 10,537 On 30 September 2003 the following options have been granted and remain outstanding in respect of ordinary shares of 25p in the company under the company's Save As You Earn Scheme. No of shares Option price Grant dated 11 July 2001 56,901 #2.87 Exercisable during the six months commencing 1 September 2006 Grant dated 2 January 2003 1,943,500 #0.96 Exercisable during the six months commencing 1 September 2008 8 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit 1,925 563 6 Provision made against fixed asset investments (28) 91 59 Depreciation charges 1,063 1,200 2,212 Goodwill amortised 627 487 969 (Increase)/decrease in debtors (30,014) 9,717 (34,946) Increase/(decrease) in creditors 31,368 (6,463) 38,672 Net cash inflow from operating activities 4,941 5,595 6,972 Independent Review Report to Charles Stanley Group PLC We have been instructed by the company to review the financial information set out above which comprises the profit and loss account, balance sheet, cash flow statement, statement of recognised gains and losses and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modification that should be made to the financial information as presented for the six months ended 30 September 2003. SAFFERY CHAMPNESS Chartered Accountants London 11 November 2003 Financial Calendar 11 November 2003 Results announced 19 November 2003 Ex-dividend date for interim dividend 21 November 2003 Record date for interim dividend 17 December 2003 Interim dividend paid June 2004 Final results announced FOR FURTHER INFORMATION PLEASE CONTACT SIR DAVID HOWARD PETER A HURST Chairman Finance Director Phone 020 7739 8200 Fax 020 7953 2948 ANDREW MEIGH HSBC Phone 020 7991 8888 This information is provided by RNS The company news service from the London Stock Exchange END IR ILFERLILILIV
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