(Alliance News) - Retail stockbroker Share PLC on Thursday reported its first interim profit since 2014 on higher customer numbers.
In the six months to June 30, Share swung to a pretax profit of GBP151,000 compared to a GBP275,000 loss the year before.
Share attributed the swing to higher revenue and lower transactional and marketing costs.
The company's revenue increased 8.8% to GBP11.1 million from GBP10.2 million the year before. Share said: "This reflected higher fee income and an increase in interest income that together offset the reduction in dealing commission."
Fee income jumped 19%, driven by higher customer numbers. Interest income almost doubled.
Share said its Dealing Commission income slipped 9%, reflecting lower trading activity. The firm's trading volumes were down 18%, but noted this was "better than the wider market".
Total costs were 2.8% higher year-on-year at GBP11.0 million, although lower trading volumes saw a fall in transactional costs and the company also reduced its marketing activity.
"I am pleased to report that the group returned to profitability in the first half as expected, despite weaker trading conditions. Subdued investor sentiment has resulted in a significant drop in trading volumes across the market from which Share is not immune," said Chief Executive Richard Stone.
He continue: "However, the engine of our growth has been the acquisition of customer accounts, coupled with our attractive flat-fee structure and high service levels, and this is set to continue. This was the group's first interim operating profit since 2014 and it is worth noting that had trading in the first half of 2019 been at the levels seen in the same period in 2018, operating profit would have been GBP400,000 higher."
Share said it expects its financial performance to continue to improve, in line with market expectations, despite the "continuing challenging trading conditions" caused by Brexit.
"We anticipate trading volumes will recover as the political position is resolved and personal investors re-position their portfolios," the stockbroker added.
In April, the stockbroker acquired 20,000 clients from JPMorgan, predominantly investment trusts, totalling GBP750 million of assets under management.
The transfer of the active book is expected in September. Share now has about 300,000 customers with GBP5.3 billion of assets.
Stone added: "While political and economic uncertainty is likely to continue to adversely affect investor sentiment in the short term, we believe that Share remains in a strong position to continue its momentum over the second half. We look forward to welcoming the new customers who will transfer from JPMorgan in September. We therefore remain well-positioned to continue to build on the good progress that we are making."
Share PLC was trading 1.3% higher in London on Thursday at 31.90 pence each.
