11th Mar 2014 09:55
LONDON (Alliance News) - Share PLC Tuesday said 2013 pretax profit more than doubled, boosted by heightened investor interest after the initial public offering of Royal Mail PLC and by historically low interest rates driving savers to equity markets in the search for yield.
The company, which owns investment site The Share Centre, also said it is still looking for "suitable" acquisitions, in line with its strategy.
In a statement, Share said pretax profit rose to GBP1.7 million in 2013 from GBP668,000 in 2012, as revenue grew by 7.8% to GBP15.0 million and administrative expenses rose by 4.7% to GBP13.6 million. Investment revenues also rose to GBP311,000 from GBP298,000.
The significant difference between the pretax profit rise and the increase in operating profit, being revenue less administrative expenses, was a result of GBP562,000 of "other losses" in 2012. They related to writing off the development cost of its partially developed bespoke-fund accounting system which was being developed to support the expected growth in the Sharefunds business unit, whose operations were scaled back in 2013.
According to Share, the principal driver of revenue growth was increased dealing activity in the market, with dealing commission increasing to GBP6.7 million from GBP5.0 million, though Share noted that revenues were boosted by the "the return of large scale retail initial public offerings - most notably the Royal Mail", which brought the general public to the market. Increased costs were a result of higher staff spend.
Share Chief Executive Richard Stone said 2014 has started "promisingly", boosted by further public market offerings in the wake of the Royal Mail PLC IPO in Autumn 2013, the prospect of interest rates remaining low for "some considerable time" as central banks continue to encourage economic recovery, and regulatory changes in the industry.
"In the first two months of 2014 we have seen the number of new Share Accounts, individual savings accounts and self-invested-personal-pensions opened by customers increase by 34% on the same two months in 2013. This increased level of account opening activity, and of activity within those accounts, means we believe we can look forward to the rest of 2014 with confidence," Stone said in a statement.
Share increased its dividend to 0.52 pence from 0.43 pence in 2012.
Share shares were Tuesday quoted at 30.00 pence, up 3.5%.
By Samuel Agini; [email protected]; @samuelagini
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