For Subscribers

Get the complete article now!

TWST: Can we start off with a quick update on developments at Charles Stanley (London: CAY.L) since we spoke about eighteen months ago?

Mr. Clark: Historically, over the last twenty-five years we have looked to grow the company during bear phases in the market more so than in bull phases. So in this eighteen month period, we have done a couple of acquisitions. We now have an office in Edinburgh through the acquisition of a firm called Torrie & Co, and we have also extended our penetration into the Southeast of England and the South Coast by purchasing a firm that had four offices including an office in Bournemouth which we merged with our existing Bournemouth operation. We’ve also acquired an office in Brighton and that enabled us to relocate and combine another office we had in Lewis, a neighboring town. So there has been some expansion and reorganization. Also, Charles Stanley’s been involved in corporate finance, corporate brokerships, really since the mid-90s, but it’s been a small albeit profitable part of our business. We’ve been looking over the last couple of years for opportunities to grow that business from talented individuals that have come out of the bigger houses that are lightening the load. And in fact, we suddenly came across a situation where we were able to pick up ten people which we have put into our London office and therefore our corporate broking, corporate finance capability has taken a quantum leap forward.

TWST: So this has been a good time to position yourself for when the market picks up a little further down the line?

Mr. Clark: That’s right. We still maintain our position in the market as a full service broker, which means we’re still looking at the lower end of the market, such as online trading, right through the full gamut of broking and discretional portfolio management, financial planning, but also the corporate broking aspect where we have had an opportunity which has come about because of market conditions to increase that operation substantially.

TWST: Is the acquisition strategy more about geographic coverage, extending the footprint, or adding products and services to your offering?

Mr. Clark: A bit of both. In terms of the geographic footprint, if we find people that we like and an area that we like, then we’re either happy to bring it into an existing situation that we have nearby or even open up a new office. In terms of the corporate finance acquisition, that obviously substantially strengthened our capability in that area and positioned us as a serious player in the marketplace rather than being a small but profitable player.

TWST: Can we bring much of the issues you’ve raised together and take a look at your key objectives for the company over the next 12 months or so?

Mr. Clark: I think our objectives as a business are two-fold. One is to maintain the quality of service that we provide to our existing clients, because it’s what you’ve already got that’s important to hold onto in these times; that’s first and foremost. And the second objective is obviously one has to look at opportunities to build a business in bad times when other people give up. I did allow myself a smile when Schwab Europe sold to Barclay’s Bank and withdrew from the UK. I thought that was quite significant and it is the sort of thing that happens in this sort of market.

TWST: How well or appropriately do you feel the investment community as responded to your company and how you’ve been navigating the landscape?

Mr. Clark: I think that Charles Stanley is emerging. If you look at what’s happened in our industry over the last ten years, you’ve either been an acquirer or you’ve been gobbled up yourself. We’ve been a survivor, we’ve been an acquirer and so suddenly we have a higher profile whether we particularly chose it or not. And we’ve had to cope with that by having more of a marketing capability and a media capability. I would still say we probably don’t promote ourselves as well as we should and we’re trying to get better at that because that’s the way the game is played today. But, I’d rather be a slow burn than a firework that bursts into light and disappears again, so we’re working on that.