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Close Brothers Group (GB:CBG)
:CBG

Close Brothers Group (CBG) AI Stock Analysis

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Close Brothers Group

(OTC:CBG)

56Neutral
Close Brothers Group faces significant challenges in revenue and cash flow, reflected in a moderate financial performance score. Technical analysis indicates short-term weakness but some long-term support. Valuation scores are low due to negative earnings and lack of dividends. Strategic actions, such as asset sales and executive share purchases, show potential for improvement but are countered by recent losses and provisions. Overall, the stock reflects a cautious outlook amid restructuring efforts.

Close Brothers Group (CBG) vs. S&P 500 (SPY)

Close Brothers Group Business Overview & Revenue Model

Company DescriptionClose Brothers Group plc, a merchant banking company, engages in the provision of financial services to small businesses and individuals in the United Kingdom. It operates through five segments: Commercial, Retail, Property, Asset Management, and Securities. The company offers various savings products, including personal and business savings, and pension deposits. It also provides asset finance, asset-based lending, commercial vehicle hire, short-term bridging finance, insurance premium finance, invoice discounting and debt factoring, and property finance products. In addition, the company offers funding services for general aviation aircraft, and various leisure and commercial marine vessels; brewery rentals; finance services to the agriculture, construction, manufacturing, and transport industries; leasing services for the construction, manufacturing, IT equipment, and specialist assets; and loan, hire purchase, leasing, and refinancing services to the professional service sector, including dental, medical, pharmacy, and veterinary sectors. Further, it provides financial education, investment management, and financial planning and advice services; self-directed services that help investors to manage their portfolio online; and services for financial advisers. Additionally, the company offers liquidity and flexible execution services to retail stockbrokers, wealth managers, and institutional investors; market making, sales, research, and corporate broking services; and dealing, custody, and settlement services to the institutional, wealth management, and brokerage clients. Close Brothers Group plc was founded in 1878 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyClose Brothers Group makes money primarily through its Banking division, which generates revenue by providing loans and financing solutions to SMEs and individuals while earning interest income. The Securities division contributes to the company's earnings by offering trading services, where it makes money through trading commissions and fees from market-making activities. The Asset Management division generates revenue by offering wealth management and financial planning services, earning management and performance fees based on assets under management. Key factors contributing to its earnings include a strong focus on customer relationships, disciplined underwriting practices, and a diversified portfolio of financial services tailored to meet specific client needs.

Close Brothers Group Financial Statement Overview

Summary
Close Brothers Group faces revenue and cash flow challenges amidst a stable balance sheet. While profitability margins have declined, the company maintains sufficient equity and reduced leverage, indicating a balanced risk profile. Overall, the company should focus on revitalizing revenue growth and enhancing cash flow management to strengthen financial stability.
Income Statement
65
Positive
The income statement shows a declining revenue trend from 2023 to 2024, with a significant drop of approximately 23.2%. Gross profit margins remain strong at 100%, typical for the banking industry, but the net profit margin decreased from 6.08% in 2023 to 9.81% in 2024. While EBIT and EBITDA margins also depict a decline, the company has managed to maintain positive profitability, suggesting cost controls are in place despite revenue pressures.
Balance Sheet
72
Positive
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.28 in 2024, slightly improved from 1.81 in 2023, indicating reduced leverage. The equity ratio is 13.08%, showcasing a moderate equity base relative to total assets. Return on equity decreased to 5.45% in 2024 from 4.93% in 2023, reflecting reduced profitability but still acceptable for the banking sector.
Cash Flow
50
Neutral
The cash flow statement highlights challenges with negative free cash flow in 2024, a reversal from positive free cash flow in 2023. Operating cash flow to net income ratio is negative, indicating cash management issues. The free cash flow to net income ratio also reflects a negative trend, suggesting potential liquidity concerns and a need for improved cash management strategies.
Breakdown
Sep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.02B1.33B1.14B1.16B1.09B
Gross Profit
1.02B1.33B1.14B1.16B1.09B
EBIT
252.30M113.50M234.80M270.70M144.00M
EBITDA
252.30M220.20M333.10M-23.30M236.70M
Net Income Common Stockholders
100.40M81.10M165.20M202.10M109.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.58B2.21B1.38B1.44B1.46B
Total Assets
14.08B13.55B12.68B12.03B11.07B
Total Debt
2.36B2.99B3.03B2.75B2.76B
Net Debt
-1.58B776.80M1.65B1.31B1.30B
Total Liabilities
12.24B11.91B11.02B10.47B9.62B
Stockholders Equity
1.84B1.64B1.66B1.57B1.45B
Cash FlowFree Cash Flow
-426.50M631.20M-259.80M43.30M125.90M
Operating Cash Flow
-382.00M693.10M-201.40M100.10M175.50M
Investing Cash Flow
-1.15B-603.60M-243.70M-806.60M-177.30M
Financing Cash Flow
513.40M736.80M391.50M681.80M274.80M

Close Brothers Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price270.40
Price Trends
50DMA
317.93
Negative
100DMA
270.61
Negative
200DMA
356.53
Negative
Market Momentum
MACD
-8.37
Positive
RSI
39.50
Neutral
STOCH
22.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CBG, the sentiment is Negative. The current price of 270.4 is below the 20-day moving average (MA) of 309.85, below the 50-day MA of 317.93, and below the 200-day MA of 356.53, indicating a bearish trend. The MACD of -8.37 indicates Positive momentum. The RSI at 39.50 is Neutral, neither overbought nor oversold. The STOCH value of 22.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:CBG.

Close Brothers Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
£155.07B8.9413.62%5.54%3.98%5.43%
75
Outperform
£41.20B7.999.03%2.86%5.56%31.39%
74
Outperform
£43.52B11.469.84%3.99%31.97%-21.96%
GBNWG
71
Outperform
£36.45B8.4513.18%4.69%15.69%11.47%
63
Neutral
$14.35B9.948.94%4.37%16.34%-11.76%
GBCBG
56
Neutral
£402.86M4.53-6.71%3.73%-172.06%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:CBG
Close Brothers Group
276.40
-151.40
-35.39%
SCBFF
Standard Chartered
14.72
6.34
75.66%
GB:BARC
Barclays
296.75
113.99
62.37%
GB:HSBA
HSBC Holdings
883.00
286.96
48.14%
GB:LLOY
Lloyds Banking
72.46
22.79
45.88%
GB:NWG
NatWest Group
463.50
205.00
79.30%

Close Brothers Group Corporate Events

Regulatory Filings and Compliance
Close Brothers Group Announces Total Voting Rights Update
Neutral
Apr 1, 2025

Close Brothers Group plc, a financial services company, announced that as of March 31, 2025, its total issued listed share capital consisted of 152,060,290 ordinary shares, with 1,572,747 held in Treasury, resulting in 150,487,543 shares with voting rights. This information is crucial for shareholders to determine their major interest in the company, as per the Disclosure Guidance and Transparency Rules.

Executive/Board Changes
Close Brothers Group Announces Executive Share Award and CEO Remuneration
Neutral
Mar 25, 2025

Close Brothers Group plc has announced a share award under its Omnibus Share Incentive Plan to its executive director, Mike Morgan, who has recently been appointed as Group Chief Executive Officer. The award is part of the Long Term Incentive Plan and is subject to performance measures over a three-year period. Additionally, Mr. Morgan will receive an annual salary of £968,000 and a pension allowance, with his total restricted stock awards for the 2025 financial year valued at £650,000. These remuneration arrangements align with the Directors’ Remuneration Policy approved by shareholders.

Other
Close Brothers Chairman Acquires Shares, Signaling Confidence
Positive
Mar 20, 2025

Close Brothers Group plc announced that its Chairman, Michael Biggs, has purchased 5,000 ordinary shares of the company at a price of £2.884 per share. This transaction, conducted on the London Stock Exchange, indicates a potential vote of confidence in the company’s financial health and future prospects by a key executive, which could positively influence stakeholder sentiment.

Business Operations and StrategyFinancial Disclosures
Close Brothers Group Reports Half-Year Loss Amid Strategic Restructuring
Negative
Mar 18, 2025

Close Brothers Group reported a statutory operating loss before tax of £103.8 million for the first half of 2025, primarily due to a £165 million provision related to motor finance commissions. Despite this, the company achieved a pro-forma CET1 capital ratio of 13.4% following the sale of Close Brothers Asset Management, which simplified the group and allowed a sharper focus on its lending business. The group continues to implement cost management initiatives, expecting annualized savings of £25 million by the end of the financial year, and maintains a strong balance sheet with a CET1 ratio significantly above the requirement.

Business Operations and StrategyRegulatory Filings and Compliance
Close Brothers Group Sees Change in Major Holdings
Neutral
Mar 17, 2025

Close Brothers Group PLC has announced a change in its major holdings, with FIL Limited increasing its voting rights to 5.115% as of March 13, 2025. This acquisition of voting rights by FIL Limited, a Bermuda-registered entity, could potentially influence the strategic decisions and operations of Close Brothers Group, impacting its market positioning and stakeholder interests.

Regulatory Filings and Compliance
Close Brothers Group Announces Updated Share Capital and Voting Rights
Neutral
Mar 3, 2025

Close Brothers Group PLC announced that its total issued listed share capital as of February 28, 2025, consists of 152,060,290 ordinary shares, with 1,572,747 held in Treasury. This leaves 150,487,543 shares with voting rights, a figure shareholders can use to determine their major interest in the company under regulatory rules. This announcement provides transparency and helps stakeholders understand their shareholding status, potentially impacting shareholder decisions and market perceptions.

M&A TransactionsBusiness Operations and Strategy
Close Brothers Completes Sale of Asset Management Division to Oaktree
Positive
Mar 3, 2025

Close Brothers Group has completed the sale of its wealth management division, Close Brothers Asset Management (CBAM), to Oaktree Capital Management. This strategic move is expected to strengthen Close Brothers’ capital base, increasing its common equity tier 1 capital ratio by approximately 120 basis points. The transaction, valued at around £146 million, will allow Close Brothers to focus on its core business operations. Oaktree plans to invest in CBAM’s technology and operations to enhance service quality and drive long-term growth.

M&A TransactionsBusiness Operations and Strategy
Close Brothers Completes Sale of Asset Management Unit to Oaktree
Positive
Mar 3, 2025

Close Brothers Group has successfully completed the sale of its wealth management business, Close Brothers Asset Management (CBAM), to Oaktree Capital Management. This strategic move is part of Close Brothers’ efforts to strengthen its capital base and focus on core business operations, with an expected increase in the common equity tier 1 capital ratio by approximately 120 basis points. The transaction is anticipated to yield a gain of around £59 million, enhancing the company’s financial position and simplifying its operations.

Legal ProceedingsBusiness Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Close Brothers Group Faces Motor Commission Challenges Amid Strong Financial Performance
Negative
Feb 12, 2025

Close Brothers Group has announced a provision of up to £165 million in its financial statements for the first half of 2025 due to recent developments in motor commissions. This provision, which could significantly impact its CET1 capital ratio, is in response to legal and operational costs related to regulatory reviews and potential customer remediation. Despite these challenges, the group has made progress in capital actions, including the anticipated completion of the sale of Close Brothers Asset Management, which is expected to bolster its capital ratio. The company reported a robust financial performance for the period, with a slight decline in its loan book due to selective lending for risk optimization and maintaining strong margins in its banking operations.

Business Operations and Strategy
Close Brothers Executives Acquire Shares, Signaling Confidence in the Group
Positive
Feb 6, 2025

Close Brothers Group plc announced that several senior executives, including the Group Head of Human Resources, the Group Chief Finance Officer, the Chief Executive Officer of Close Brothers Asset Management, and the Group Chief Risk Officer, have acquired shares under the company’s Share Incentive Plan. This move, involving transactions conducted at the London Stock Exchange, may indicate a strengthening of management’s commitment to the company, potentially boosting investor confidence and aligning management interests with those of shareholders.

Regulatory Filings and Compliance
Close Brothers Group Announces Total Voting Rights Update
Neutral
Feb 3, 2025

Close Brothers Group PLC has announced its total issued listed share capital as of 31 January 2025, which includes 152,060,290 ordinary shares, with 1,572,747 held in Treasury, resulting in 150,487,543 shares with voting rights. This figure is significant as it aids shareholders in determining their major interest in the company, which is crucial for compliance with the Disclosure Guidance and Transparency Rules.

Executive/Board ChangesBusiness Operations and Strategy
Tracey Graham Expands Non-Executive Roles, Joining Virgin Money UK and Clydesdale Bank
Positive
Jan 23, 2025

Close Brothers Group PLC has announced that Tracey Graham, an Independent Non-Executive Director, has taken on additional roles as a Non-Executive Director at Virgin Money UK PLC and Clydesdale Bank PLC. This appointment, effective from 23 January 2025, could enhance the strategic insights and governance capabilities of Close Brothers, potentially strengthening its positioning within the financial sector.

Jupiter Fund Management Adjusts Stake in Close Brothers
Jan 17, 2025

Jupiter Fund Management PLC has acquired or disposed of voting rights in Close Brothers Group PLC, holding 5.59% of the voting rights as of January 16, 2025. This change in voting rights could influence Close Brothers’ shareholder dynamics, impacting its strategic decisions and stakeholder interests.

Close Brothers Group Executives Acquire Shares Under Incentive Plan
Jan 8, 2025

Close Brothers Group plc has announced the acquisition of shares under the company’s Share Incentive Plan by key managerial personnel. The transactions, executed on January 6, 2025, at the London Stock Exchange, involve significant figures such as the Group Head of Human Resources, Group Chief Risk Officer, Chief Executive Officer of Close Brothers Asset Management, and Group Chief Finance Officer. These acquisitions reflect the company’s ongoing commitment to align managerial interests with shareholder value, potentially strengthening stakeholder confidence.

Close Brothers Group Announces Leadership Change
Jan 7, 2025

Close Brothers Group has announced the departure of Adrian Sainsbury from his role as Group Chief Executive due to health reasons, effective January 6, 2025. Mike Morgan, previously Group Finance Director and interim Chief Executive, has been appointed as the new Group Chief Executive, ensuring leadership continuity and strategic delivery.

Close Brothers Group Announces Total Voting Rights and Capital
Jan 2, 2025

Close Brothers Group has announced its total issued listed share capital as of December 31, 2024, which consists of 152,060,290 ordinary shares. Out of these, 1,572,747 shares are held in Treasury, leaving 150,487,543 shares with voting rights. This figure is crucial for shareholders when calculating changes in major interests according to the Disclosure Guidance and Transparency Rules.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.