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26 Jul 2012 11:00
Charles Stanley Group PLC
25 Luke Street
London
EC2A 4AR
T: 020 7739 8200
F: 020 7739 7798
DX: 123150 BROADGATE-1
www.charlesstanleyplc.co.uk
INTERIM MANAGEMENT STATEMENT
26 July 2012
QUARTER ENDED 30 JUNE 2012
This statement, issued on the day of our Annual General Meeting, is an Interim Management Statement ("IMS") in accordance with the UK Listing Authority's Disclosure and Transparency Rules. It covers the period from 1 April 2012 to 26 July 2012, and includes trading results for the three months ended 30 June 2012.
Charles Stanley Group PLC announces that its revenue for the three months to 30 June 2012, the first quarter of its financial year 2012/13, was 8.7% lower, at £28.2 million, than the comparable figure of £30.9 million for the three months to 30 June 2011. Challenging market conditions and entrenched economic uncertainty have continued to depress financial activities and transaction volumes. Despite these headwinds, key elements of our business continue to display considerable resilience and our well capitalised and highly liquid balance sheet positions us well to address this adverse environment and take advantage of the attractive opportunities this will doubtless provide.
Total client funds stand at £14.81 billion reflecting a modest decrease of 2% from the figure of £15.04 billion at 30 June 2011. Within this figure discretionary managed funds increased by 3.0% from £4.78 billion to £4.94 billion reflecting a net inflow of funds during the period. Over the same period the FTSE 100 Index and the APCIMS Balanced Portfolio Index fell by 6.0% and 2.1% respectively.
The first quarter has seen a continuation of the downturn in transaction volumes and against this backdrop we have seen a £2.4 million reduction in commission revenues. Despite the drop in market values, our fee income has been resilient, recording only a 2% decline over the comparable period in the last financial year. Fee income represented approximately 60% of our revenue over the period. Muted market conditions continue to be reflected in the performance of CS Securities which recorded a fall in revenue of approximately £0.5 million. During the quarter, a number of cost savings were made within this division and we are confident that the second quarter will produce an upturn, due to a number of transactions being completed in the first quarter but being recognised as fee income in the second quarter.
We anticipate that economic and market conditions will remain uncertain but are confident that our broadly based business mix and financial strength will allow us to produce a creditable performance.
For further information please contact:
Charles Stanley Group PLC | Canaccord Genuity | Peel Hunt LLP | |
Sir David Howard, Chairman | Martin Green | Guy Wiehahn | |
James Rawlingson, Finance Director | |||
Phone: 020 7739 8200 | Phone: 020 7523 4619 | Phone: 020 7418 8893 | |
Magnus Wheatley |
| ||
Head of Press & Public Relations |
| ||
Phone 020 7149 6273 |
| ||
Funds under management and administration are analysed below:
Jun 12 |
Mar 12 |
Jun 11 | Change since Mar 12 | |
£ billion | £ billion | £ billion | % | |
Discretionary funds under management | 4.94 | 5.02 | 4.78 | (1.6%) |
Advisory managed funds | 2.64 | 2.74 | 2.86 | (3.6%) |
Total managed funds | 7.58 | 7.76 | 7.64 | (2.3%) |
Advisory dealing funds | 2.84 | 3.03 | 3.09 | (6.3%) |
Execution only funds | 4.39 | 4.58 | 4.31 | (4.1%) |
Total administered funds | 7.23 | 7.61 | 7.40 | (5.0%) |
Total funds under management and administration |
14.81 |
15.37 |
15.04 |
(3.6%) |
FTSE 100 Index | 5,571 | 5,769 | 5,946 | (3.4%) |
APCIMS Balanced Portfolio Index | 2,940 | 3,002 | 3,006 | (2.1%) |
Funds under management decreased by 2.3% during the quarter and this change is analysed in more detail in the following table. A net inflow of funds from discretionary managed clients has been offset by a net outflow of funds from advisory managed clients leaving a net change in total managed funds in line with change in market values during the quarter.
Discretionary managed | Advisory managed |
Total |
Change | |
£ bn | £ bn | £bn | % | |
Funds at 1 April 2012 | 5.02 | 2.74 | 7.76 | |
Inflows | ||||
New clients of existing investment managers |
0.08 |
0.01 |
0.09 | |
Clients of new investment managers | 0.01 | 0.01 | 0.02 | |
Organic - new funds from existing clients | 0.19 | 0.08 | 0.27 | |
Total inflows | 0.28 | 0.10 | 0.38 | 4.9% |
Outflows | ||||
Lost clients | (0.06) | (0.08) | (0.14) | |
Organic - withdrawal of funds by existing clients | (0.18) | (0.07) | (0.25) | |
Total outflows | (0.24) | (0.15) | (0.39) | (5.0%) |
Net inflow of funds | 0.04 | (0.05) | (0.01) | (0.1%) |
Market movement | (0.12) | (0.05) | (0.17) | (2.2%) |
Funds at 30 June 2012 | 4.94 | 2.64 | 7.58 | |
% change in quarter | (1.6%) | (3.6%) | (2.3%) | |
REVENUE
Quarter ended 30 June 2012
Private Clients £'000 |
Financial Services £'000 | Charles Stanley Securities £'000 |
Other £'000 |
Total £'000 | |
Commission | 10,300 | 66 | 1,032 | - | 11,398 |
Fees | |||||
Investment management | 8,071 | 109 | - | - | 8,180 |
Administration | 5,020 | 3,017 | - | - | 8,037 |
Corporate Finance | - | - | 547 | - | 547 |
Other | - | - | - | 8 | 8 |
Total fees | 13,091 | 3,126 | 547 | 8 | 16,772 |
Total | 23,391 | 3,192 | 1,579 | 8 | 28,170 |
Quarter ended 30 June 2011
Private Clients £'000 |
Financial Services £'000 | Charles Stanley Securities £'000 |
Other £'000 |
Total £'000 | |
Commission | 12,412 | 94 | 1,259 | - | 13,765 |
Fees | |||||
Investment management* | 7,987 | 88 | - | - | 8,075 |
Administration* | 5,330 | 2,839 | - | - | 8,169 |
Corporate Finance | - | - | 839 | - | 839 |
Other | - | - | - | 60 | 60 |
Total fees | 13,317 | 2,927 | 839 | 60 | 17,143 |
Total | 25,729 | 3,021 | 2,098 | 60 | 30,908 |
'* £730,000 of trail commission has been re-classified from investment management fees to administration fees for the quarter ended 30 June 2011.
Notes for editors
Charles Stanley Group PLC has five trading companies, Charles Stanley & Co. Limited, EBS Management PLC, CS Financial Solutions Limited, Garrison Investment Analysis Limited and Jobson James Financial Services Limited
Charles Stanley & Co. Limited provides full-service stockbroking, financial planning and benefit consultancy and small and mid cap advisory and institutional broking.
EBS Management PLC provides specialist pensions administration services. CS Financial Solutions Limited is a specialist provider of corporate employee benefits services. Garrison Investment Analysis Limited markets unit trusts, open-ended investment company units and packaged financial products to private clients, both directly and in wrappers such as ISAs and pensions. Jobson James Financial Services Limited provides wealth management advice and services for both private and corporate clients including pensions and retirement planning.
All five trading companies are regulated by the Financial Services Authority. The Group has 33 offices around the United Kingdom.
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