LONDON (Alliance News) - Charles Stanley Group PLC Wednesday reported a small increase in first-quarter revenue but said that it is approaching the coming months with considerable caution because of the cost of its continuing investment programme and falling commission revenue.
In a statement, the investment management group said that it made GBP37.3 million in revenue in the three months ended June 30, compared with 36.9 million in the corresponding quarter last year. However, the group said it was disappointed by the poor performance of commission income, which fell to GBP12.7 million, from GBP15.2 million, due to lower transaction volumes.
However, the fall was more than offset by an increase in fee income, which moved up to GBP24.6 million, from GBP21.7 million, particularly bolstered by a 21% rise in investment management fee income due to changes the group made to its charging structure last year.
Charles Stanley has been investing in the business, with profitability in its last financial year hit by the acquisition of teams of investment managers, the continuing roll-out of the direct-to-client web-based service Charles Stanley Direct, and a programme to upgrade the the quality of service of its main business of discretionary and advisory investment management.
"This investment in our business has continued into the current year and will continue to have an effect on margins," Charles Stanley said, though it noted that current revenue remains stable.
Meanwhile, total client funds grew to GBP20.14 billion, from GBP20.09 billion over the course of the quarter.
Charles Stanley shares were Wednesday quoted down 1.4% at 345.00 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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