LONDON (Alliance News) - Charles Stanley Group PLC on Thursday warned that its targeted 15% operating margin will probably take 12 to 18 months longer than expected in the absence of a "significant" market rally.
The guidance came as Charles Stanley reported that its full-year losses narrowed, and said "solid progress" was made in arresting the drop in its profitability, beginning to implement a "strategic direction" and building foundations for growth, as the company looks to achieve its goal of becoming the UK's leading wealth manager by 2020.
Chief Executive Officer Paul Abberley said: "The impact on near-term revenues from the current challenging market environment, presents trade-offs between recording short term improvements in profitability and investing in the full implementation of the long-term strategy."
That could lead to an "extension" of the "timeframes" originally expected, Abberley said. "Achievement of a 15% operating margin is still regarded as attainable but is likely to take 12 to 18 months longer than originally anticipated in the absence of a significant market rally. We will proceed prudently," Abberley said.
In a statement, Charles Stanley said it made a pretax loss of GBP687,000 from continuing operations in the year ended March 31, which narrowed from the GBP4.4 million pretax loss a year earlier, and maintained a total dividend for the year of 5.0 pence per share.
Revenue fell to GBP138.7 million from GBP144.3 million, administrative expenses to GBP139.3 million from GBP141.9 million and impairment charges for intangible assets and investments dropped to GBP465,000 from GBP8.3 million.
Charles Stanley, which completed the sale of its employee benefits business for GBP2.0 million in April and its corporate broking division in July 2015, reported a profit from discontinued operations of GBP333,000 in the year ended March 31, versus a GBP1.3 million loss a year earlier. The company now has four main operating divisions: investment management services, asset management, financial planning and its Charles Stanley Direct.
"The new management team has now been in place for over a year and we are moving steadily along a transformational path from being a traditional stockbroking business to a full-scale holistic wealth manager. Much has been achieved already and there is much still to be done," Chairman David Howard said in a statement.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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