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Sept. 22, 2020, 2:33 a.m. EDT

Close Brothers 2020 profit falls on virus hit

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By Jaime Llinares Taboada

Close Brothers Group PLC on Tuesday posted a significantly lower profit for the fiscal year, reflecting reduced interest margins and impairment charges, and proposed to pay a final dividend of 40 pence a share.

The financial-services company made a net profit of 109.5 million pounds ($140.3 million) for the twelve months ended July 31, almost half the GBP201.6 million a year earlier.

Bottom-line results were hit by impairment charges of GBP183.7 million--compared with fiscal 2019's GBP48.5 million--reflecting the hit of the coronavirus pandemic.

The net interest margin declined to 7.5% from 7.9%, with the company blaming lower activity levels and forbearance measures.

Close Brothers proposed a full-year dividend of 40 pence a share, down from 66 pence a year earlier. The group had cancelled the April interim dividend, but have now agreed to a final payment "following a resilient financial and operational performance in the second half."

"While dividend decisions in the 2020 financial year have reflected the unprecedented uncertainty caused by Covid-19, our aim remains to return to a long-term policy of progressive and sustainable dividend growth in future," Close Brothers said.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

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