Preliminary results for the year ended 31 July 2019
24 September 2019
Highlights
- The group delivered a solid performance with continued strong returns and profitability
- We achieved higher profits in Banking while the Asset Management division and Winterflood faced more challenging conditions and overall, adjusted operating profit reduced 3% to £270.5 million
- The CET1 capital ratio increased to 13.0% and return on opening equity remained strong at 15.7%
- Banking adjusted operating profit increased 1% to £253.7 million, benefiting from our continued disciplined approach to lending and the diversity of our business portfolio. The net interest margin was broadly stable at 7.9%, the bad debt ratio remained low at 0.6% and the loan book grew by 5.7% to £7.6 billion
- Continued good momentum in the Asset Management division with strong net inflows at 9%. Adjusted operating profit of £21.8 million, down 6%, reflects lower average market levels throughout the year and continued investment to support the long-term growth potential of the business
- Winterflood delivered solid trading profitability in a difficult market environment, with only two loss days in the year. Operating profit of £20.0 million, down 29%, reflects significantly lower market activity
- The board is proposing a full year dividend per share of 66.0p, up 5%
- On a statutory basis, group operating profit before tax from continuing operations decreased 2% to £264.7 million
- As separately announced today, Preben Prebensen has decided to step down after ten years as chief executive. Preben will remain with the group for the next 12 months to ensure a successful handover
|
Key Financials1 |
Full year 2019 |
Full year 2018 |
Change % |
|
Adjusted operating profit2 |
£270.5m |
£278.6m |
(3) |
|
Operating profit before tax (continuing operations) |
£264.7m |
£271.2m |
(2) |
|
Adjusted basic earnings per share (continuing operations) |
136.7p |
140.2p |
(2) |
|
Basic earnings per share (continuing operations) |
133.5p |
136.2p |
(2) |
|
Basic earnings per share (continuing and discontinued operations) |
134.2p |
134.7p |
(0) |
|
Dividend per share |
66.0p |
63.0p |
5 |
|
Return on opening equity |
15.7% |
17.0% |
|
|
Net interest margin |
7.9% |
8.0% |
|
|
Bad debt ratio |
0.6% |
0.6% |
|
|
|
|
|
|
|
|
31 July 2019 |
1 August 2018 |
Change % |
|
Loan book |
£7.6bn |
£7.2bn |
5.7 |
|
Total client assets |
£13.3bn |
£12.2bn |
9.0 |
|
CET1 capital ratio |
13.0% |
12.7% |
|
|
Total capital ratio |
15.2% |
15.0% |
|
|
1 Please refer to definitions on page 19. 2 Adjusted operating profit exclude £5.8 million (2018: £7.4 million) of amortisation of intangible assets on acquisition, and profit from discontinued operations of £0.8 million (2018: loss of £3.0 million). |
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Preben Prebensen, Chief Executive, said:
“I am pleased that the group has delivered a very solid performance, maintaining strong returns and profitability. The Banking division has achieved good loan book growth whilst maintaining strong margins and consistent pricing in a competitive market, and our market facing businesses have continued to deliver strong net inflows and solid trading profitability in challenging conditions. The disciplined application of our business model and investment in key strategic initiatives give us confidence that we can continue to support our customers in a wide range of market conditions.
As you will have seen from today's announcement, I have decided that the time has come to step down as chief executive in the next 12 months. It has been a privilege to lead such a special and successful organisation over the last ten years. The group is clearly well positioned for the future, with an excellent team in place, and I look forward to working closely with the Board over the next year to continue delivering on our strategy and ensure a smooth and successful transition.”
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Directorate Change |
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|
24 September 2019 |
|
Close Brothers Group plc (“Close Brothers” or “the group”) announces that after ten years, Preben Prebensen has decided that the time has come to step down as chief executive, and move on to the next stage of his career.
The Board will now commence a formal search for a successor, considering both internal and external candidates. Preben will remain with the group for the next 12 months to ensure a smooth handover.
Mike Biggs, Chairman, said:
“I am immensely grateful for Preben's strong and successful leadership during a period of significant growth and development for Close Brothers. Preben has refocused, professionalised and strengthened the organisation, while preserving the core values and long-term discipline which are at the heart of our business model. The Board will now commence a thorough search for a successor, in line with our well-established succession process, to ensure we continue to protect and build on this successful model in years to come.”
Preben Prebensen, Chief Executive, said: “After ten years as chief executive, it is now time for me to hand over the leadership of Close Brothers. It has been a privilege to lead such a special and successful organisation, and I am deeply grateful for the dedication and commitment of our employees and the support of the Board during this time. The group is clearly well positioned for the years ahead, with an excellent team in place, and I look forward to working closely with the Board over the next year to continue delivering on our strategy and ensure a smooth and successful transition.”