Shares in the business opened approximately 8% lower at £3.54, despite the wealth manager’s reported profit before tax up by 53.3% to £6.9m.
As part of its efforts to continue the “trend of improving profitability”, the firm said that it has completed the “initial turnaround”.
Paul Abberley, chief executive officer at Charles Stanley, said: “The first step toward this has now been delivered and the business has returned to profitability, achieving top line growth by focusing on core wealth management activities.
“Our second step has been to put in place improved governance, better cost control and revised remuneration structures.”
In its interim report for the six months ended September 2017, the firm also stated that core revenue was up 9.8% to £74m and the core operating margin improved to 7.3%. Funds under management also rose 1.3% to £24.3bn.
Abberley said that the firm continues to “benefit from a favourable market” which he argued is likely to persist on a six-to-12-month view.
He added: “We are now focused on the third but hardest step, that of invigorating our new business channels and more generally improving our productivity across both front and back office.
“We do, however, face headwinds in the form of major regulatory change which is driving additional IT and process change costs and, in recent months, from lower than expected commission income.
“We will therefore need either a higher level of trading activity or other revenue increases to be generated in the second half in order to meet current market expectations.”
Despite warnings, Abberley said the firm will begin to “bear fruit” and has increased its dividend to 2.5p from 1.5p last year.
