Charles Stanley’s funds under management and advice (Fuma) jumped 2.1% in the six months to the end of September although its three-year restructuring plan, currently underway, is set to cost £9.5m, according to its interim results.
Fuma increased from £24.1bn as at 31 March to £24.6bn as at 30 September while its discretionary funds under management jumped 6.1% to £13.9bn, from £13.1bn in H1 2019.
Underlying profit before tax rose by 71.9% to £9.8m, compared with £5.7m in the first half of the year. Reported profits after adjusting items also increased to £8.1m from £5.1m in H1 2019 while the adjusted profit margin climbed from 9.3% to 11.2%.
In addition, underlying revenue was £85.4m compared with £77.7m for H1 2019. By division, this was £77m for investment management services, £4.5m for Charles Stanley Direct and £3.9m for financial planning.
Charles Stanley chief executive Paul Abberley said: “This is an encouraging set of results. The increase in profits demonstrates that the hard work of recent years is now bearing fruit.
Restructuring programme expected to cost £9.5m
The firm said its programme to improve productivity and efficiency, announced in May, saw a one-off cost of £1.2m and is expected to create annualised savings of £800,000. The three-year programme is expected to cost about £9.5m and save the firm about £4.5m overall.
Abberley added: “The business transformation programme that is underway is focused on improving the group’s distribution capability and streamlining operational processes. In the short term, it will temper profitability given the costs, but will establish a stronger platform for long-term, sustainable growth.”
