Charles Stanley To Raise £15.8 Million Amid Business Shake-up

Amisha Mehta Reporter London 16 April 2015

Charles Stanley To Raise £15.8 Million Amid Business Shake-up

London-listed Charles Stanley is to raise £15.8 million via an institutional share placing, it announced in a trading update.

The UK's Charles Stanley will raise £15.8 million ($23.3 million) through a share placing as it continues its move to focus entirely on wealth management.

The investment manager will raise the capital via the issue of 4,596,000 new ordinary shares and cut its total dividend by 60 per cent from last year to 5 pence, it said in a pre-close trading update. It is targeting a group operating margin of at least 15 per cent by 2018.

The business overhaul will see the group sell off Charles Stanley Securities, which provides advisory, broking and corporate finance services, and Charles Stanley Financial Solutions, an employee benefit solution provider.

With the new capital, Charles Stanley will propel the revised strategy into force. The major changes come as a result of a strategic business review led by the new chief executive Paul Abberley, who was appointed to succeed Sir David Howard in December.

“We have a strategy to modernise and significantly improve the operating performance of the group and the placing will help support the execution of such strategy,” said Abberley in the update.

“The current disaggregated model will be changed into a unitary structure: a single financial planning capability, offering a consistent suite of planning advice with clear leadership and governance,” the company said.

In light of lower bargain volumes and a shift towards fee-only tariffs, a 13.9 per cent fall in the group's commission income offset a 17.8 per cent increase in investment management fee income.

Charles Stanley reported a 6 per cent year-on-year climb in funds under management and administration of £21.3 billion at the end of March, and anticipates that underlying profits will be in line with market expectations.

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