Winterflood limits damage at Close Brothers

29th Sep 2009 07:53

Merchant bank Close Brothers produced a 'solid' full-year performance thanks in no small part to a doubling of profits at market maker Winterflood, although profit still fell 11%.Adjusted operating profit from continuing operations for the year ended 31 July slipped to £113.7m from £127.5m in 2008 on adjusted operating income up 11% to £502.1m.The banking business proved 'resilient' and is seeing 'good demand', notably in asset, motor and property finance. Adjusted operating profit dropped to £54m from £74.5m, but the loan book increased 6% to £2.4bn.Profit at the unit was hit by an increase in the bad debt ratio to 2.6% from 1.3% last year, although that was slightly less than analysts had feared.At the asset management business, profit sank 63% to £12m, but profit at the securities division, which includes market maker Winterflood, jumped 68% to £64.9m.Winterflood has benefited from market volatility, helping boost bargains per day to over 42,000 from 27,000 in 2008 and profit to £47.3m from £23.5m last time.Close said the unit has had a strong start to the financial year with good volumes in August and September. Looking ahead, Close said bad debts are expected to remain at a high level, while fund flows at asset management are expected to remain uncertain. 'Overall market conditions remain uncertain but we are confident that our strong businesses will allow us to continue to deliver a resilient performance,' it said.An unchanged final dividend of 25.5p a share leaved the total dividend flat at 39p