Close Bros first half profit up despite more challenging markets

Specialist financial services group Close Brothers reported a rise in first half profit despite a more challenging market backdrop.

For the six months to the end of January, adjusted operating profit was up 2% from the first half of 2015 to £111.2m. Adjusted basic earnings per share edged up 5% to 61.1p, generating a return on opening equity of 17.9%.

Pre-tax operating profit, meanwhile, rose to £108.7m from £106.2m.

The company said the banking division continued to deliver growth at strong returns with 4.0% loan book growth in the first half to £6bn and bad debts at a long-term low of 0.6%.

Winterflood, which provides trading services in the UK, continued to trade profitably, posting adjusted operating profit of £6.8m. However, this was lower than the previous year, reflecting difficult market conditions throughout the period.

Close Brothers’ asset management business made further progress, with good net inflows at 8% of opening managed assets. However, total client assets fell to £9.1bn from £10.2bn, mainly due to the disposal of its corporate business which completed in November, and the impact of negative market movements.

The company lifted its ordinary dividend per share to 19p from 18p in 2015.

Chief executive Preben Prebensen said: "We are pleased to report a solid first half result for the group, with further growth in our earnings and dividend against a backdrop of more challenging market conditions.

“With our strong capital position, prudent funding and long track record we remain well positioned to continue to invest in our business and deliver sustainable growth and strong returns."

Close Bros said it continues to see growth opportunities for its lending businesses, both in existing markets and through new initiatives.

“Winterflood remains sensitive to market conditions but is well positioned when conditions improve and in Asset Management we expect continued net inflows and progress in the business.”