Charles Stanley — H1 2021 Earnings Presentation
25 slides from Charles Stanley's earnings presentation, Nov 19, 2020
Slide 1: Interim Results Presentation
Charles Stanley Interim Results Presentation Six months ended 30 September 2020 19 November 2020
Slide 2: Agenda
Agenda 1. Overview 2. Financial results 3. Business transformation 4. Outlook Appendices Paul Abberley Ben Money-Coutts Chief Executive Officer Chief Financial Officer
Slide 3: Overview
Overview Resilient performance in the face of the COVID-19 crisis 12.9% growth of Funds under Management and Administration since 31 March 2020 Group responded effectively, moving to home working, and maintained normal high level of customer service throughout the COVID-19 crisis Transformat
Slide 4: 2. Financial results
1. Overview 2. Financial results 3. Business transformation 4. Outlook Ben Money-Coutts Chief Financial Officer
Slide 5: H1 2021 – Progress of key financial metrics
H1 2021 – Progress of key financial metrics FuMA (£bn) 24.6 1.2 22.8 1.5 1.1 Increase of 12.9% to £22.8bn since 31 March 2020. This was achieved 20.2 1.0 1.2 1.2 through a combination of market growth and strong investment 8.0 6.9 Total Recovery of FuMA performance. However, average FuMA for the p
Slide 6: Underlying profit before tax growth record
Underlying profit before tax growth record £20.0m £19.3m £15.0m £13.3m £10.2m £10.9m £10.0m £9.5m £6.7m £5.6m H2 £5.6m H1 £3.3m £5.0m £9.1m £6.6m £6.7m £4.8m £5.3m £3.9m - (£1.5m) (£5.0m) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 HY 2021 Page 5
Slide 7: FuMA – Up 12.9% since year end and mix improved
FuMA – Up 12.9% since year end and mix improved Advisory Advisory Execution Growth in FuMA since 31 Discretionary Managed Dealing only Total March 2020 attributable to market recovery £bn £bn £bn £bn £bn Inflows from new clients of Funds at 1 April 2020 12.0 1.2 1.0 6.0 20.2 £0.3bn were offset b
Slide 8: Financial summary
Financial summary Underlying profits have H1 2021 H1 2020 Change fallen 27.5% as a result of the £m £m 4.1% decline in revenues but Revenue 81.9 85.4 (4.1%) only a 1.2% fall in expenses Expenses (75.2) (76.1) 1.2% Net finance income and other non-op income (0.1) (0.2) 50.0% The effective tax rat
Slide 9: Revenue
Revenue H1 2021 H1 2020 Change £m £m Overall revenues were down Investment Management Services 72.9 77.0 (5.3%) 4.1% but this was considerably Charles Stanley Direct 4.5 4.5 - less than the decline in FuMA for a number of reasons: Financial Planning 4.5 3.9 15.4% 81.9 85.4 (4.1%) IMS increased its
Slide 10: Underlying expenditure well-controlled
Underlying expenditure well-controlled Fixed staff cost increased by £1.3m to £27.8m mainly Front office Support H1 2021 H1 2020 reflecting the recruitment of additional financial planning divisions Functions Total Total resource £m £m £m £m Non-staff cost increased by Fixed staff costs (14.6) (
Slide 11: Adjusting items
Adjusting items Restructuring costs of £0.6m mainly relate to the outsourcing of IT infrastructure maintenance, creation of the centralised middle office team and reorganisation of parts of the front office H1 2021 H1 2020 £m £m Amortisation of client relationships is treated as an Restructuring
Slide 12: Strong Balance sheet – net assets £115.4m
Strong Balance sheet – net assets £115.4m HY 2021 FY 2020 Change £m £m Total intangible assets 19.0 20.0 (5.0%) Total tangible non-current assets 21.6 24.3 (11.1%) Non-current assets 40.6 44.3 (8.4%) Cash and treasury bills 92.1 93.5 (1.5%) Strong cash reserves Other current assets 199.1 205.4 (3.
Slide 13: Cash flow
Cash flow £1.4m net movement in cash balance for the period attributable to final dividend payment in relation to the prior year Page 12
Slide 14: 3. Business transformation
1. Overview 2. Financial results 3. Business transformation 4. Outlook Paul Abberley Chief Executive Officer
Slide 15: Business transformation
Business transformation Actions in H1 2021: successful transition to outsourcing IT services improving standardisation of operations following the creation of Middle Office consolidation of initiatives to improve productivity and operational efficiency £0.6 million of exceptional costs rec
Slide 16: 4. Outlook
1. Overview 2. Financial results 3. Business transformation programme 4. Outlook Paul Abberley Chief Executive Officer
Slide 17: Outlook
Outlook Continued challenges ahead but the Group is financially and operationally well-positioned to navigate through successfully supported by a strong balance sheet and substantial cash balances Focus is on growth initiatives and transformation programme to improve efficiencies and create
Slide 18: Appendices
1. Overview 2. Financial results 3. Business transformation 4. Outlook Appendices
Slide 19: Change in FuMA by service type in HY 2021
Change in FuMA by service type in HY 2021 Discretionary Advisory Managed 0.2 (0.1) New clients (0.2) Transfers Transfers +1.6bn Net outflow from existing 0.1 +/-bn (0.1) Lost clients Market movement clients Lost clients 1.7 Market movement Advisory Dealing Execution-only 0.1 (0.1) New clients Transf
Slide 20: Divisional analysis
Divisional analysis Investment Management Charles Stanley Services Direct Financial Planning Underlying Six months ended 30 September 2020 £m £m £m £m Revenue 72.9 4.5 4.5 81.9 Direct costs: Fixed staff costs (10.5) (0.5) (3.6) (14.6) Variable staff costs (20.5) - (0.6) (21.1) Other direct operating
Slide 21: IMS – Divisional performance
IMS – Divisional performance H1 2021 H1 2020 Change £m £m Fee 53.7 54.9 (2.2%) Commission 17.6 18.4 (4.3%) Interest 1.6 3.7 (56.8%) Improved asset Revenue 72.9 77.0 (5.3%) mix, with Contribution 34.2 36.4 (6.0%) Discretionary funds Profit before tax 8.6 10.8 (20.4%) now representing 1 70.5% (H1 20
Slide 22: Charles Stanley Direct – Divisional performance
Charles Stanley Direct – Divisional performance H1 2021 H1 2020 Change £m £m AuA remained stable Revenue 4.5 4.5 - £3.2bn (H1 2020: £3.2bn) Contribution 2.6 2.6 - Profit before tax 0.4 0.7 (42.9%) Revenues remained flat for period Revenue margin (bps) 30 29 1 Contribution margin 57.8% 57.8% -
Slide 23: Financial Planning – Divisional performance
Financial Planning – Divisional performance The Group continues to invest in the Financial Planning division as a key component of its wealth management H1 2021 H1 2020 Change offering to clients £m £m Revenue 4.5 3.9 15.4% Revenues up 15.4% to £4.5m, exceeding the current market Contribution (0
Slide 24: Disclaimer
Disclaimer The information contained in this document has been prepared by Charles Stanley Group PLC (the ‘Group’ or ‘Company’) and is valid at 19 November 2020. This document does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any shares in th
Slide 25: Charles Stanley
CHARLES STANLEYs
Charles Stanley Group — H1 2021 Earnings Presentation on 6ix