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Liontrust's Cross & Fosh up Charles Stanley stake as shares climb

Liontrust's Cross & Fosh up Charles Stanley stake as shares climb

Citywire AAA-rated managers Anthony Cross (pictured) & Julian Fosh - largest external holders of Charles Stanley – have upped their stake in the business following a 10% spike in its shares in the last month.

The value duo increased their holding in the company from 10.2% of shares to 11% worth £21 million at a price of 376p, up from 345p a month ago when it reported a 30% rise in pre-tax profits.

The bulk of that is held via their £925 million Liontrust UK Smaller Companies fund. The purchase is their first since January, following a series of buys made during 2017, lifting their exposure from 3.1 million shares to 5.5 million, according to Reuters shareholder data.

At the time of publication a spokesperson for Liontrust had not responded to a request for comment.

Interest in the discretionary manager and funds broker has spiked since the company reported full year results in June showing profit before tax up from £8.8 million to £10.9 million and earnings per share up 40% to 17.2p.

Charles Stanley reported improved revenue across all areas of its business, while consumer division Charles Stanley Direct reported a maiden profit. Core internal profit margins rose from 7.1% to 8%, and its annual dividend was lifted by a third to 8p per share.

Clients poured net inflows of £1.5 billion into the business, although more challenging market conditions at the end of the period marginally reduced total assets from £24 billion to £23.8 billion. Discretionary funds managed by the group rose 7.9% to a record £12.3 billion.

Speaking as the company was snapping up Charles Stanley shares in 2017, UK Smaller Companies co-manager Matt Tonge said: ‘We believe that management at Charles Stanley are successfully improving the business through a mixture of reorganisation, cost control and a greater focus on recurring income.'

He added that it scored highly on ‘intellectual property, strong distribution channels, and significant recurring business’ metrics which the team used to grade potential purchases.

The City has turned much more cautious on the firm in the last year, on a median price target of 380p offering marginal upside. Over that period broker guidance tracked by Reuters has dropped from being rated as a universal buy to a 2:1 margin on hold. 

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Matthew Tonge
Matthew Tonge
10/55 in Equity - UK Smaller Companies (Performance over 3 years) Average Total Return: 56.35%
Julian Fosh
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9/55 in Equity - UK Smaller Companies (Performance over 3 years) Average Total Return: 56.35%
Anthony Cross
Anthony Cross
8/55 in Equity - UK Smaller Companies (Performance over 3 years) Average Total Return: 56.35%
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