Walker Crips shares dip on lower profits and flat AUM

Investment management company Walker Crips Group plc (LON: WCW) said it had consolidated its position by innovating to expand its business base. This came along with the following results as part of the Company’s trading statement for teh full year ended March 31 2019.

The Company said that revenue remained the same as 2018, at £30.5 million. Similarly, Group AUM and Discretionary AUM remained level at £5.0 billion and £3.3 billion respectively, on a year-on-year basis.

Underlying operating profit before tax and exceptional items, however, fell from £906,000 to £434,000 on-year, while reported profit before tax also dropped from £924,000 to £489,000 for the full year.

Walker Crips comments

Attached to the update, Company Chairman David Gelber added the following insights,

“Notwithstanding this, reported revenue has remained stable with a significant improvement in fee income, offsetting the decline in broking commissions of £2.3 million.”

“The Group continues its efforts to help clients achieve greater returns by transferring to our discretionary or portfolio-managed mandates, which also generates more stable fee-based revenue. These efforts, and the decline in less predictable transaction-based shared commission income during the year, mean the ratio of non-broking revenue to total income has improved to 71.6% (2018: 64.1%).”

“We are closely monitoring the Government’s progress around Brexit and the impact of the present uncertainty. Given the Group’s predominantly UK centric customer base and operations, the impact of Brexit manifests in second order effects including lower trading volumes as the uncertainty influences investor sentiment. During this period, we continue to maintain a material cash buffer, regulatory capital headroom and a dividend policy that allows continued investment in new revenue stream initiatives, technologies to improve customer experience and achieve procedural and process efficiencies, and to build our ‘Software as a Service’ offering. We are committed to a programme of tightly controlling non development expenses, pushing through revenue initiatives and creating new product offerings.”

CEO Sean Lam then continued,

“Last year, we embarked upon a new vision – “Walker Crips, a Technology Driven Financial Services Company”. All the core objectives of shareholder value, customer service, operational effectiveness and efficiency, are still there, but only by emphasising and investing in technology as the delivery mechanism will the core objective be achieved. Our transformation is underway and gathering pace as we progress toward this objective.”

Investor notes

The Company’s shares dipped 2.78% or 0.75p to 26.25p a share 11/07/19 14:56 GMT.

Elsewhere in wealth management, there have been updates from; Liontrust Asset Management PLC (LON: LIO), Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.