Close Brothers reinstates dividend amid 'resilient performance'

(Sharecast News) - Merchant banking group Close Brothers said on Tuesday that the firm had delivered a "resilient performance" in the year ended 31 July but acknowledged that its outlook was "still uncertain".
Close Brothers posted a 47% decline in pre-tax profits to £140.9m, principally due to a 278% surge in impairment costs to £183.7m as a result of the Covid-19 pandemic. Basic earnings per share dropped 45% to 74.5p.

The group, which opted not to pay an interim dividend this year, declared a full-year dividend of 40.0p - down slightly from the 44.0p payment made to investors last year.

While Close Brothers said it remained focused on pricing and underwriting discipline, income in the year was impacted by lower activity levels and forbearance measures, resulting in a net interest margin of 7.5%.

The FTSE 250-listed firm's loan book remained broadly stable at £7.62bn.

Chief executive Andrew Sainsbury said: "The impact of Covid-19 has been felt across our businesses and the outlook is still uncertain, but the fundamental strengths of Close Brothers remain unchanged.

"Our resilient model and the experience and expertise of our people leave us well-positioned to respond to opportunities and to continue to support our customers and clients into the future."

As of 0910 BST, Close Brothers shares were up 2.86% at 990.0p.