Close Brothers first-half operating profit up 6%

FTSE 250 merchant bank Close Brothers posted a 6% jump in first-half adjusted operating profit on Tuesday thanks to a good performance across its businesses.

In the six months to the end of January, adjusted operating profit rose to £142.3m from £134.2m in the same period a year ago, while adjusted basic earnings per share were up 7% to 71.2p.

In the banking division, adjusted operating profit increased 5% to £128.5m, with a stable net interest margin of 8.2% and a low bad debt ratio of 0.7% versus 0.5% the year before. In the group's securities arm, Winterflood, adjusted operating profit rose 2% to £14.7m, benefiting from continued investor trading activity and rising markets, while operating profit in the asset management business was up 25% to £11.4m.

Meanwhile, the interim dividend was lifted 5% from the previous year to 21p per share.

Chief executive Preben Prebensen said: "We are pleased with our performance and progress in the first half, delivering higher profit while staying true to our client and customer focused model, and maintaining our prudent and disciplined approach.

"All our businesses have achieved a good performance year to date, and we remain well positioned for the full year.

"Longer term, we are confident that the consistent application of our business model, along with our strong customer relationships, the expertise of our people and the quality of our service will allow us to continue performing well in all market conditions."

Canaccord Genuity said this was "a decent set of results", with adjusted operating profit ahead of its £134.5m estimate, driven by income across all three businesses, but Winterflood in particular. Meanwhile, the dividend of 21p per share was in line with the brokerage's forecast.

At 0935 GMT, the shares were down 0.8% to 1,563p. Canaccord noted that the stock has had a strong run since lows in November, outperforming the FTSE 250 by around 13% over the past three months.