INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Profitability of Core Operations * increased 200.0% to £3.0m (H1 2014/15: £1.0m) Arrested decline in profitability. Reported profit £2.0m (H1 2014/15: loss £3.9m) Balance sheet strengthened. Net assets £86.9m (31/3/15: £68.9m). 148% regulatory capital surplus Progress made in-line with previously stated turn around strategy £16.3m placing in April 2015 Disposal of non-core businesses: Charles Stanley Securities and Charles Stanley Financial Solutions Re-organisation of Asset Management and Financial Planning divisions Charles Stanley Direct restructured Milestones for H2 New rate card to be introduced from 1 December 2015 Consultation for investment manager remuneration to be completed Substantial schedule of work ahead, 3-5 years timeline to completion * Core Operations represents Charles Stanley’s continuing operations excluding assets Held for Sale, being Charles Stanley Secu rities and Charles Stanley Financial Solutions INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Funds under management Reported profit/(loss) before Reported Core profit before tax tax £11.6m (3.4)% £11.2m £2.0m £2.3m £2.9m 200.0 % 151.3 % £(3.9)m £3.0m £8.9m £8.7m £1.0m H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 Discretionary Advisory Managed Margin from Core Operations Interim Dividend per share Net Assets and Reg Capital Surplus 147.9% 39.9 % 105.7 % (50.0)% £25.9m 180.0 % £26.1m 4.2% 3.00p £61.0m 1.50p* £42.8m 1.5% H1 2016 H1 2015 H1 2016 H1 2015 30/09/2015 31/03/2015 *Rebased Tangible assets Intangible assets INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
H1 2016 H1 2015 % Change FUMA movement in-line with FUMA (£bn) 20.0 20.2 (1.0)% WMA balance index over the Managed 11.2 11.6 (3.4)% period (1.0)% (FTSE 100: (8.5)%) Administered 8.8 8.6 2.3 % Core Operations trending Core Operations positively Revenue (£m) 70.8 68.4 3.5 % Profit before tax (£m) 3.0 1.0 200.0 % EPS (p) 5.26 2.85 84.6 % Pre-tax margin (%) 4.2 % 1.5 % Exceptional costs and losses Reported profit/(loss) before tax (£m) 2.0 (3.9) 151.3 % significantly reduced Dividend in-line with rebased Dividend per share (p) 1.5 * 3.0 (50.0)% policy * Rebased INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
£bn H1 2016 H1 2015 % Change Discretionary 8.9 8.7 2.3 % Growth in discretionary and execution only via Charles Stanley Direct offset by Advisory Managed 2.3 2.9 (20.7)% market movement and declines in other services Total Managed 11.2 11.6 (3.4)% Advisory Dealing 2.0 2.2 (9.1)% Execution Only 6.8 6.4 6.3 % Total Administered 8.8 8.6 2.3 % Total Funds 20.0 20.2 (1.0)% FTSE 100 6,062 6,623 (8.5)% WMA Balanced 3,421 3,454 (1.0)% INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Inflow from Existing and New Clients, £0.8bn Lost Clients, £(0.6)bn Market Opening Movement, FUMA £(1.5)bn Closing (1st Apr), FUMA £21.3bn (30th Sep), £20.0bn INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Discretionary Income margins remain H1 '16 0.85 % 0.57 % 0.26 % 0.02 % stable 0.82 % H1 '15 0.56 % 0.24 % 0.02 % New rates to be introduced to end discount pricing on H1 '16 0.53 % 0.23 % 0.01 % managed 0.78 % Advisory smaller accounts and price service levels appropriately 0.64 % H1 '15 0.45 % 0.17 % 0.02 % H1 '16 0.39 % 0.13 % 0.23 % 0.02 % Advisory dealing 0.40 % H1 '15 0.12 % 0.25 % 0.03 % Execution only H1 '16 0.43 % 0.16 % 0.24 % 0.03 % H1 '15 0.43 % 0.15 % 0.25 % 0.03 % All categories H1 '16 0.75 % 0.48 % 0.25 % 0.02 % 0.72 % H1 '15 0.46 % 0.24 % 0.03 % INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
£m H1 2016 H1 2015 % Change Fees Commission Interest Total Revenue Net finance and other income Underlying income Underlying operating expenses Underlying profit Improvement in fees due to improved fee revenue margin and continuing shift toward fee only tariffs Trading volumes up 10.3% by comparison to weak prior year comparatives. Second quarter activity was more subdued than first quarter in-line with market INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Settlement, Client and Business Remuneration Costs, costs, Marketing, £0.2m £1.9m £0.7m IT, Establishment, £(0.9)m £(0.1)m Commission, £1.1m Professional Fees, £(1.4)m Fee Interest, Income, Finance & Admin £1.7m Other Income, and £(0.5)m Other Costs, £(0.9)m Adjusted Profit H1 2016, £3.0m Adjusted Profit H1 2015, £1.0m INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
£m H1 2016 H1 2015 % Change Underlying profit before tax of Core Operations Held for Sale items Adjusting Items Amortisation of client relationships Intangible and Investment Asset Impairment (1) Profit from sale of Matterley Undervalued (2) Other net exceptional costs Profit/(Loss) before tax 1. Current period Intangible and Investment Asset Impairment attributed to Charles Stanley Financial Solutions and Sutherlands Edinburgh 2. Unrealised profit in relation to deferred consideration payable INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
FuMA per CF30 Discretionary Income per CF30 £112.6k 15.0 % £59.5m £97.9k 7.1 % £55.6m £34.8k £28.7k £26.2m £23.7m £6.8m £8.0m £77.8k £69.2k £26.5m £23.9m H1 2016 H1 2015 H1 2016 H1 2015 Fees Commission Discretionary Advisory managed Non-managed Fees to Revenue Ratio Cost to Revenue Ratio (0.6)% 7.6 % 67.1 % 105.7 % 66.7 % 97.7 % H1 2016 H1 2015 H1 2016 H1 2015 INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
£m 30/09/2015 31/03/2015 30/09/2014 Goodwill and customer relationships 22.9 23.3 32.0 Software 3.0 2.8 2.4 Total intangible assets 25.9 26.1 34.4 Fixed assets 12.2 13.3 14.6 Other non-current assets 10.0 10.0 10.4 Total tangible non-current assets 22.2 23.3 25.0 £16.3m placing in April Net cash 42.2 28.3 18.8 strengthened the group’s net cash, Working capital 7.0 1.9 8.2 net tangible assets and regulatory capital resources Assets Held for Sale 3.1 4.2 - Total net current assets 52.3 34.4 27.0 Pension deficit 11.8 13.1 10.3 Pension deficit reduced Mortgage 1.8 1.8 1.9 Total non-current liabilities 13.6 14.9 12.2 Net assets 86.9 68.9 74.2 Net tangible assets 61.0 42.8 39.8 Regulatory capital resources 55.7 37.7 38.8 INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Sale of Share Business, Placement, £0.6m £16.3m Acquisition of Intangible Assets, £(1.5)m Adjusted Working Operating capital , Profit, £(4.1)m £4.0m Capex, Closing Borrowings, Dividends, £(0.4)m (30th Sep), £(0.1)m £(1.0)m £42.3m Opening (1st Apr), £28.4m INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Market conditions currently more subdued than earlier in the year Repricing New rate card from 1 st December 2015 for new clients Phased implementation for existing clients Rebased Investment Manager remuneration Profit rather than revenue based 20% conduct element Intended to be implemented from 1 st April 2016 and impact phased over 3 years Transition to new schemes expected to lead to a higher one-off Profit and Loss charge in current year (no cash flow impact) Consultation in progress INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
Complement bespoke discretionary investment management offering with suite of asset management products Holistic wealth management offering Focused approach to intermediaries Closer integration of Charles Stanley Direct Sales training and support for investment manager population Continued focus on high levels of client delivery Operating margin target of 15%+ in 2018 INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
£m H1 2016 H1 2015 % Change 2015 Revenue Costs Net finance and other income Profit before tax Margin Bargains Managed Non-managed Average Bargain Value (£) Funds (£bn) Managed Non-managed Investment Management Services division provides personal investment services to individuals, companies, trusts and charities and includes platform dealing, custody and SIPP and ISA administration services INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
IMS Proportion of funds by account size IMS Proportion of clients by account size 45.9 % 41.3 % 26.2 % 19.0 % 17.7 % 17.0 % 12.8 % 9.3 % 4.7 % 6.1 % £0 to £100k £100k to £250k to £500k to £1m > £1m £0 to £100k £100k to £250k to £500k to £1m > £1m £250k £500k £250k £500k INTERIM RESULTS FOR THE HALF YEAR ENDED 31.09.2015
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