British wealth manager Charles Stanley has reported a drop in profit and revenue as the Covid-19 crisis hits its funds under management and administration (FuMA).

Highlights

In the six-month-period ending 30 September 2020, underlying pre-tax profit at the firm stood at £6.6m. This is a 27% decrease from the prior year figure of £9.1m.

Reported profit before tax decreased to £4.8m from £8.1m. Underlying earnings per share (EPS) dropped to 9.94p from 15.04p while reported EPS dropped to 7.06p from 13.36p.

Revenue fell 4% to £81.9m from £85.4m over the period, mainly due to Investment Management Services where revenues dipped to £72.9m from £77m.

In the firm’s online execution-only service Charles Stanley Direct, revenues remained flat at £4.5m.

The favourable spot was Financial Planning, where revenues rose 15% to £4.5m from £3.9m.

The firm was also able to reduce its staff costs leading to a fall in underlying expenditure, which dropped 1% year-on-year to £75.2m.

However, underlying non-staff related expenses increased £3.4m, driven by a 67% increase in the Financial Services Compensation Scheme (FSCS) Levy to £3.5m.

The firm’s IT costs also increased in the first half.

The firm’s FuMA averaged £22.1bn, down 9% from the previous year, but picked pace to reach £22.8bn at the end of H1 2021.

The firm maintained its interim dividend at 3 pence per share.

Charles Stanley CEO Paul Abberley said: “These are resilient results in the face of the exceptionally difficult trading conditions caused by the COVID-19 pandemic, with revenue and profits at encouraging levels. Charles Stanley reacted rapidly and effectively to the unique challenges. We maintained our normal high level of service to clients while ensuring staff safety.

“Although the effects of the pandemic will be with us for some time, Charles Stanley remains well-positioned. We have a strong balance sheet, with no debt and good cash flows.”