(Alliance News) - Curtis Banks Group PLC on Thursday reported a rise in interim profit despite flat pension administrations growth in a "subdued" market and "challenging" economic conditions.
In the six months to June 30, the pension services provider's pretax profit increased 13% to GBP5.4 million from GBP4.8 million the year before.
Curtis Banks' total revenue jumped 87% to GBP257.0 million from GBP138.0 million. Curtis Banks's policyholder investment revenue in the first half grew significantly to GBP232.5 million from GBP115.0 million the year before.
The company's operating revenue edged 6.5% higher year-on-year to GBP24.5 million from GBP23.0 million. The company's fee income increased 3% to GBP18.3 million, with 83% of its fee revenue recurring. Curtis Banks said fee revenue from its self-invested personal pensions and small self administered schemes remain the "predominant source" of income for the company.
"This performance was achieved despite challenging economic conditions overshadowing organic growth and incurring additional costs above the same period last year for the enhanced sales team recruited for future revenue generation through the new single group wide product," Curtis banks explained.
Administrative expenses climbed 7.1% to GBP18.1 million from GBP16.9 million the year before. Staff costs increased 6.8% to GBP11.7 million.
Curtis Banks upped its interim dividend by 25% to 2.5 pence from 2.0p the year before.
Curtis Banks self-invested personal pension schemes administered in the first half were broadly flat at 77,175. The company's growth in total organic new own self-invested personal pension schemes administered slowed considerably to 5,838 from 8,719 the year before, representing a 37% drop.
The company blamed the decline on "industry challenges".
"Through a combination of a slowdown in the pension transfer market, with the wider retail savings sector remaining subdued, and the evolution of our new product and sales function, our total number of new SIPPs has decreased slightly," Curtis Banks said.
The company did note, however, the total number of its own SIPPs administered increased slightly to 69,642.
"This is a solid set of results for the first six months of 2019 with the period under review showing an increase in our key financial metrics. Once again, the group has continued to grow profitably and maintains a high proportion of quality recurring earnings which demonstrates the resilience of our business against some current headwinds in the SIPP industry and wider marketplace," said Chief Executive Will Self.
"Through initiatives to stimulate both organic and inorganic growth, as well as successfully diversifying revenues by broadening our capability to commercial property clients, we have navigated the first half of 2019 extremely well. I am confident and excited about our prospects for further growth," Self added.
Looking ahead, Curtis Bank noted the SIPP market "continuing to evolve".
"A number of SIPP providers face an uncertain future as they clean up legacy books which contain illiquid investments resulting in the reduction of product innovation," the company said.
Curtis Banks believes it is "largely immune" to these pressures, however, due to its "transparent fee structure" and "simple business model".
Shares in Curtis Banks were 1.9% lower in London on Thursday at 304.00 pence each.
