Close Bros Group Plc
Half Year Results for the Six Months to 31 January 2020
10 March 2020
Highlights
- Our performance reflects the consistent application of our business model in a period of lower activity in the UK economy, with lower profits in Banking partially offset by higher profits in our market-facing businesses. The group delivered a strong return on opening equity of 13.6%
- On an adjusted basis, group operating profit reduced 9% year on year to £125.7 million. On a statutory basis, group operating profit before tax from continuing operations decreased 8% to £124.1 million
- Our capital position strengthened further, with the CET1 capital ratio increasing to 13.4%
- Banking adjusted operating profit reduced 12% year on year to £115.4 million, reflecting modest income growth combined with some normalisation of bad debts and ongoing investment
- The net interest margin was 7.8%, reflecting continued pricing discipline. The loan book remained broadly flat in the period, and the bad debt ratio increased to 0.9%, from historically low levels. Overall credit quality of the loan book remains strong. We have maintained our cost discipline while continuing with our multi-year investment programmes to protect, improve and extend the business model
- Asset Management achieved an adjusted operating profit of £12.6 million, up 17% year on year, supported by strong annualised net inflows at 12% and positive market movements, reflecting the strength of our client proposition and ongoing investment in the business
- Winterflood benefited from a recovery in investor trading activity following the UK general election and delivered operating profit of £10.6 million, up 14% year on year
- We have declared an interim dividend per share of 22.7p, up 3%, in line with our progressive dividend policy
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Key Financials 1 Continuing operations |
First half 2020 |
First half 2019 |
Change % |
|
|
Adjusted operating profit2 |
£125.7m |
£138.8m |
(9) |
|
|
Operating profit before tax |
£124.1m |
£135.6m |
(8) |
|
|
Adjusted basic earnings per share |
63.8p |
69.8p |
(9) |
|
|
Basic earnings per share |
63.0p |
68.1p |
(7) |
|
|
Ordinary dividend per share |
22.7p |
22.0p |
3 |
|
|
Return on opening equity |
13.6% |
16.1% |
|
|
|
Return on average tangible equity |
16.0% |
18.8% |
|
|
|
Net interest margin |
7.8% |
8.1% |
|
|
|
Bad debt ratio |
0.9% |
0.6% |
|
|
|
|
|
|
|
|
|
|
31 January 2020 |
31 July 2019 |
Change % |
|
|
Loan book |
£7.6bn |
£7.6bn |
(0.4) |
|
|
Total client assets |
£14.0bn |
£13.3bn |
5 |
|
|
CET1 capital ratio |
13.4% |
13.0% |
|
|
|
Total capital ratio |
15.5% |
15.2% |
|
|
|
1 Please refer to definitions on pages 19 and 20. 2 Adjusted operating profit excludes £1.6 million (2019: £3.2 million) of amortisation of intangible assets on acquisition, and profit from discontinued operations of £nil (2019: profit of £1.2 million). |
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Preben Prebensen, Chief Executive, said:
“The performance of the group continued to demonstrate the consistent application of our business model in a period of lower activity in the UK economy. We delivered a strong return on opening equity of 13.6% and declared an interim dividend 3% higher than the prior year. We are confident that our resilient business model and the deep experience of our people leave us well placed to navigate the current uncertainty, and to continue serving our customers and clients in a range of market conditions.”
“As a business that focuses on the long term, acting sustainably is integral to our strategy and culture and forms a fundamental part of our purpose – to help the people and businesses of Britain thrive over the long term. We are committed to making a lasting positive impact for people and communities, and recognise our responsibility towards the climate and natural environment.”