Results: CYBG profits in its first independent annual results; Strong half year for Severfield and losses hit Jaywing after acquisitions

CYBG, the group which includes Yorkshire and Clydesdale Banks following its demerger and IPO earlier this year has delivered its first statutory profit before tax in 5 years.

In its first maiden annual results since the demerger, the group reached £77m in pre-tax profit, compared to a loss of of £285m the year before.

A statutory loss after tax of £164m (down from last year’s £229m loss) was driven by legislative changes affecting accounting treatment of deferred tax asset according to the banks.

It has said it will be embarking on a £50m investment programme, to drive efficiencies and develop omni-channel offering.

The group, which is aiming to be a main challenger to the high street banks, said it had delivered 6.5% growth in mortgages in 2016, and saw growth in its SME book for the first time in four years, with over £2.2bn of new loans and facilities for SMEs.

Jim Pettigrew, chairman CYBG PLC, commented: “2016 has been a landmark year in the long history of our bank, as we became independent for the first time since the 1920’s.

“Our ambition is straightforward: to become the credible alternative to the big UK banks. We intend to achieve this using our scalable infrastructure to support our growth ambitions, and our enhanced digital capability to streamline process and deliver a superior customer experience.”

David Duffy, chief executive officer CYBG PLC, commented: “In our first year as a Plc, CYBG has delivered on our promises to our customers and shareholders, building strong foundations for our future growth and positive momentum going into 2017.

“Our Annual Results show a strong financial performance, with underlying profit up 39% and the first statutory profit before tax in 5 years through robust growth in mortgages, SME lending and deposits, supported by our ongoing cost reduction programme.

“As the only true full service, challenger bank of scale, we are perfectly placed to disrupt the status quo in the UK banking market.”

***

IN its half year results, Severfield announced its revenues were marginally up at £118.2m compared to £117.1m in the same period last year.

Pre-tax profits rose to £6.2m for the six months to 30 September, up from £2.6m the year before, said the group.

Ian Lawson, chief executive officer commented: “I am delighted with our strong performance in the first half, which has continued since the period end. Margins are significantly up, our order book has continued to rise to a six year high whilst our pipeline remains steady.

“In combination with the strong cash generation in the first half, this has given us the confidence to increase the interim dividend by 40% and we expect profit growth for the full year to be comfortably ahead of expectations.

“We have a strong platform from which to implement our strategy, which targets to double our underlying profit before tax over the next four years, and continue to create value for our shareholders.”

***

LOSSES have hit Jaywing in its half year results to 30 September 2016 after some major acquisitions.

Earlier this year the business acquired agencies Digital Massive and Bloom, and Jaywing has now reported a pre-tax loss of £204,000, compared to a profit of £164,000 in the same period last year due to costs relating to the new group companies.

Revenues however increased to £20.9m from £17m in 2015.

Ian Robinson, chairman of Jaywing plc, said: “The first half of the financial year has seen Jaywing continue make excellent progress in its growth strategy.

“EBITDA was up 12% organically and up by 18% after including the impact of two recent strategic acquisitions in Australia and the UK, both of which were completed towards the end of the half year in year in July and August respectively. I am also pleased to report that strong cash flow has seen net debt almost halved from £6.4m to £3.4m.

“Putting (advanced) data science at the heart of all our service offerings remains our core objective and is a key differentiator. This is being achieved through effective internal collaboration across varied but complementary skill sets across Jaywing. This enables us to provide bespoke and highly effective solutions to our clients’ most challenging briefs.”