UK merchant banking group Close Brothers Group Plc – the premium finance business of which works with more than 1,600 commercial and personal lines brokers – has released its preliminary results for the year ended July 31.
The group’s adjusted operating profit for 2022 declined by 13% from £270.7 million in 2021 to £234.8 million this time around. Operating profit before tax was down 12%, to £232.8 million – of which, £227.2 million came from banking while asset management contributed £21.7 million.
According to Close Brothers, its market-facing businesses were hit by volatility and falling markets.
“Our multi-year investment programmes are progressing well and enable us to protect our business, as well as enhance efficiency and future-proof our income-generation capabilities,” said chief executive Adrian Sainsbury (pictured), who pointed to the company’s resilient model and strong balance sheet.
“We are seeing tangible benefits from these investments.”
The CEO declared: “We have delivered a solid performance this year, and we start the 2023 financial year against a highly uncertain external environment. Although we are alert to the impact of rising inflation and interest rates on our customers and wider financial market conditions, we remain well placed to continue delivering on our long track record of profitability and disciplined growth.”
Meanwhile HL (Hargreaves Lansdown) Select fund manager Steve Clayton commented: “The most important number in this statement is the dividend, which is raised 10%, putting it back up at the pre-pandemic level of 66p per share, leaving the stock on a yield of just over 6.5%.”
The board proposed a final dividend of 44.p per share, resulting in a full-year dividend per share of 66.p. For Close Brothers, the dividend reflects not only the continued confidence in the firm’s business model but also its “solid” performance and capital position’s strength.
