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£400k revenue growth leaves Charles Stanley directors 'disappointed'

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£400k revenue growth leaves Charles Stanley directors 'disappointed'

Charles Stanley posted paltry asset and revenue growth over the three months to the end of June, impacted by poor commission income and a significant investment in the business.

Total revenue for the three months to the end of June was up £400,000 year-on-year from £36.9 million to £37.3 million.

‘Although total revenues are slightly above prior year levels the directors are disappointed by the poor performance of commission income, which has been impacted by a drop in transaction volumes,' the group, led by Sir David Howard (pictured) noted.

Transaction volumes were down 16.4% compared to June 2013. However, the drop in commission income was more than offset by a 13.4% rise in fee income to £24.6 million year-on-year. Investment management fee income in particular increased by 21% to £12.1 million on the year, reflecting changes to Charles Stanley's charging structure that were introduced last year.

The group also highlighted 2014 as a year of 'significant cost and investment in our future'.

'In particular profitability was impacted by the acquisition of teams of investment managers, the continuing roll-out of the direct-to-client web-based service Charles Stanley Direct, and a major programme of upgrading the quality of service of our principal business of discretionary and advisory investment management. This investment in our business has continued into the current year and will continue to have an effect on margins,' the group noted.

Assets stood at £20.1 billion, up only 0.2% over the three months to July. However, discretionary assets rose 3.2% to £8.5 billion over the three-month period, reflecting a net inflow. Charles Stanley Direct had £1.52 billion in funds under administration, representing a 4.9% rise during the quarter. Over the same period the FTSE 100 and the WMA Stock Market Balanced index rose by 2.2% and 1.3% respectively.

At 08:53 shares were down 4.48 pence at 342.5 pence, representing a 1.3% fall on the day.

An earlier version of this story misstated the revenue figure.

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