9th Oct 2018 11:44
LONDON (Alliance News) - Stock broker Panmure Gordon & Co has swung to a loss in the year it was taken private by a investment vehicle owned by former Barclays boss Bob Diamond.
According to annual report filed in the Companies House last Thursday, Panmure Gordon & Co recorded a pretax loss of GBP3.6 million for 2017, versus GBP387,000 profit the year before.
The company was delisted and taken private in July 2017 by Atlas Merchant Capital LLC - run by Diamond - via a newly incorporated company called Panmure Gordon Group Ltd. For 2017, Panmure Gordon Group recorded pretax profit of GBP1.8 million on a revenue of GBP15.3 million.
The core UK stockbroking business - Panmure Gordon UK Ltd - recorded a pretax loss of GBP2.1 million for the 12 month period to December-end versus a GBP1.5 million profit. The unit's revenue fell slightly to GBP28.2 million from GBP29.0 million.
Panmure Gordon UK's administrative expenses increased to GBP29.4 million from GBP26.4 million. The company racked up GBP2.5 million acquisition and share-based payments in the second half of the year - contributing to the overall loss.
The UK unit also incurred GBP1.2 million investment costs to implement new "control and operating environments" for new European market regulations known as MiFID II.
Looking ahead, the unit said it has begun a "strategic transformation" to become a merchant bank on top of stock broking. The company has invested in technology enhancements and risk capabilities which is expected to "significantly" increase costs in 2018.
Chief Executive Officer Ian Axe said: "The impact of the UK's vote to leave the European Union will not be clear for some time. As the Brexit negotiations continue, the directors will closely monitor any developments and consider the interests of our clients, employees and suppliers on any impact on the strategy for the company."
"The directors are committed to any required further investment in resources to support any regulatory or legal challenges the company may face in this regard."
Separately, rival stockbroker Cenkos Securities last month cut its interim dividend payment after recording a steep drop in first half earnings profit and revenue. Pretax profit dived to GBP464,000 from GBP4.6 million a year earlier. Revenue fell to GBP18.1 million from GBP29.2 million.
Cenkos declared an interim dividend of 2.0 pence per share, less than half the 4.5p a year ago.
On Tuesday, Cenkos reported the departure of its Chief Executive Anthony Hotson after just a little over a year in the role.
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