Charles Stanley falls as commission dries up
Stockbroker Charles Stanley might have been taking a few orders to sell shares in the company after announcing a drop in revenues in the final three months of 2011.
Stockbroker Charles Stanley might have been taking a few orders to sell shares in the company after announcing a drop in revenues in the final three months of 2011.
Total revenues for the period fell from £32.3m at the equivalent point in 2010 to £27.3m in 2011.
The company says fees income increased by 5.8% over the period but what really did the damage was a big drop in commission income from £16.6m in the previous year to £10.6m by the end of December 2011.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Total client funds under management has remained stable at £14.48bn versus £14.5bn at the same point of 2010.
Shares in Charles Stanley fell 7.92% on the morning of the trading update.
Rival broker Peel Hunt described the update as "mixed" and expects to reduce full year earnings forecasts by around 10%, though it notes that the stock is still by some distance the cheapest in the sector, and retains its "buy" recommendation.
"Overall, the statement reports higher AuM [Assets under Management] than expected, although revenues declined on lower commission income," Peel Hunt analyst Stuart Duncan observed. Peel Hunt had predicted AuM would ease to £14.3bn.
In Duncan's view "the key highlight was a small outflow of circa £0.2bn from the core managed funds, driven by a combination of lower inflows and a mix of lost clients and withdrawals from existing clients."
"Following this morning's statement, we would expect to reduce our current PBT/EPS [profit before tax/earnings per share] forecast of £15.5m/24.7p by c£2m. Consensus currently stands at £17.0m/27.0p. This would equate to a downgrade of approximately 10%, although the caveat remains that conditions for the rest of the year (March year-end) remain volatile and difficult to predict," Peel Hunt said.
BS
-
Buying a property is cheaper than renting again – how much could you save?
News Zoopla research shows it is now 8% cheaper to buy than rent. We reveal the places where you can save more by getting on the property ladder.
By Marc Shoffman Published
-
Is now a good time to invest in India?
Should you invest in India? Its market has stood out of the emerging market pack, helped by a growing pool of domestic investors.
By Cris Sholto Heaton Published