Close performs ‘solidly’ but Winterflood remains under pressure

Close Brothers said it has made a solid start its financial year despite a challenging time for its securities division, Winterflood.

In a brief trading update covering the first quarter, Close said assets under management in its fund arm rose by 2% on the corresponding period of the previous year to £8.5 billion, thanks largely to positive market movements.

The firm also said the revenue margin increased over the period mainly due to the greater proportion of higher margin private client assets.

This offset weakness at Winterflood.

Close told the stockmarket: ‘Winterflood has continued to be affected by the low volume trading environment, with average bargains per day reduced compared to the last financial year, while income per bargain was broadly stable.’

Meanwhile Close's banking arm displayed strength, with the loan book rising 4% to £4.3 billion thanks to growth from motor finance, asset finance and property.

The firm remains confident it can overcome uncertainty at Winterflood and have a good year.

‘Overall the group remains well positioned for the remainder of the financial year. The banking division continues to see prospects for growth and asset management remains on track to move into profitability during the course of this financial year,' Close said.

‘Winterflood continues to be affected by difficult trading conditions but remains well placed for when market conditions improve.’