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April 24, 2012 6:15 pm
Panmure Gordon said it hoped to turn a corner this year after the sale of its lossmaking US subsidiary, as the stockbroker reported a pre-tax loss of £28.6m for 2011.
Most of the deficit – Panmure’s fourth consecutive annual loss, and four times the prior year’s figure – was caused by operating losses of £6.5m at San Francisco-based ThinkEquity, and by a £16.8m writedown on the remaining US business after Panmure agreed to sell it to its management for a nominal sum last month.
Panmure’s UK business made an operating loss of £3.7m, the company said on Tuesday, blaming low levels of trading and corporate transactions. But its performance had improved this year, said Ed Warner, chairman.
“We’ve made money every month this year and will do so again in April,” he said.
The return to profitability was helped by cost cuts in the final two months of last year. The cuts, which encompassed redundancies and the suspension of pension contributions, reduced administrative costs in the UK by £4m, or about a fifth of the total.
Panmure’s net revenues last year were £37.9m, down 6.4 per cent from the prior year.
Mr Warner said Panmure was likely to move into discretionary wealth management under its new chief executive, Philip Wale, who will join from rival Seymour Pierce this summer. The expansion could come via the acquisition of a small wealth management company, which would probably require the company to raise new capital. The move had the backing of QInvest, the state-backed Qatari investment bank, which owns 44 per cent of Panmure.
“The Qataris have a long held ambition in wealth management, and Panmure Gordon can be a part of that,” Mr Warner said.
Rivals have seen Panmure Gordon as increasingly vulnerable following the ill-fated £31.9m acquisition of ThinkEquity in 2007. It came close to being bought by Evolution Securities in 2010, and rival broker Cenkos also expressed interest in an acquisition near the end of last year.
The company, which did not declare a dividend, reported a diluted loss of 21.2p per share, from a loss of 5.1p per share in 2010.
The shares fell 16 per cent to 11.75p, although only 60,000 shares, worth just £7,000, were traded on Tuesday.
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