8th Aug 2018 11:51
LONDON (Alliance News) - Share PLC said Wednesday it sunk to an interim loss due to regulatory costs, as it also acquired three businesses.
For the six months ended June, the stockbroker which owns The Share Centre sunk to a GBP275,000 pretax loss from a GBP75,000 profit the year prior. This was despite revenue rising 15% to GBP10.2 million from GBP8.9 million the year before.
Profit performance was hurt by a sharp rise in administrative expenses to GBP10.7 million from GBP9.1 million the year prior. This was primarily due to costs associated with regulatory changes, in particular MiFID II and General Data Protection Regulation.
Share explained "mitigating actions" to these costs are expected to benefit the second half of the year.
Assets under administration rose to GBP5.0 billion from GBP4.3 million the year before.
Share has also agreed to acquire three companies with around 38,000 customer accounts and GBP1.5 billion in assets under administration. Amongst these acquisitions, were the customer assets of bankrupt former broker Beaufort Securities Ltd.
"These results show the positive progress the business continues to make," Share Chief Executive Officer Richard Stone said. "We continue to grow our own brand business as well as being seen as a 'good home' for customer books and a trusted partner for third parties."
"We are also pleased with the advances we made with our Digital Transformation Programme, which underpins the group's long-term growth opportunity," Stone added. "The first half of 2018 was challenging in terms of the changes required to accommodate new regulations, principally MiFID II and GDPR, and the impact on customer service, with MiFID II adding 'grit' to the customer journey and lengthening many offline interactions."
"These regulatory changes have been a contributory factor in an increase in the group's cost base," Stone continued. "We have taken steps to mitigate this and we expect the benefit of these commercial changes (which took effect in July) to have a positive impact on the second half financials."
"Looking ahead," Stone said, "the future remains bright and we have plans to substantially increase the scale of the business, both organically and through acquisitions and partnerships."
Shares in the company were 0.8% higher at 25.80 pence on Wednesday.
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