ShoreCap profits creep up amid investment in corporate broking
Rising costs and increased investment in corporate broking dragged on profits growth at stockbroker Shore Capital in the first half of the year but were mostly offset as profits accelerated in asset management.
Financial Services
14,051.23
16:59 26/04/24
Shore Capital Group Ltd.
222.50p
16:55 31/10/19
Group revenue of £21.6m in the six months ended 30 June was up 6.5% on the same period last year as revenue from capital markets fell 8.5% to £13.5m, while turnover at the asset Management division climbed up 48.7% to £7.3m.
Group profit before tax of £2.6m edged up from £2.5m a year ago, as capital markets profits fell 19% to £2.7m as net margin dropped to 20.3% from 23.0%, while asset management profits more than tripled to £1.3m as margins mushroomed to 17.7% from 8.3%. The Principal Finance division, which invests in attractive opportunities and seed new funds, recorded a pre-tax loss of £0.7m, up from £0.4m.
Earnings per share up 10.4% to 7.4p, while the balance sheet had £24.8m of cash and £2.8m of gilts and bonds at the period end, plus funds held in other investments and via the Puma VCT funds.
Investments were made in corporate broking and research teams, "reflecting the division's changing mix of business, which we have anticipated becoming weighted towards primary issuance", management said.
Activity included acting as joint bookrunner on a £198m placing on behalf of Playtech and joint bookrunner on the £70m fundraising by Dairy Crest, providing takeover advice for Styles & Wood and Zenith Hygiene, while since the period end ShoreCap also acted on the IPO of Nucleus Financial.
"We have sustained our focus on excellent client service; supporting high-quality and entrepreneurial management teams to grow their businesses; and creating valuable opportunities for investors. We remain optimistic for the future, investing in the business to make the most of the opportunities before us, despite the volatility created by the political uncertainty," said chairman Howard Shore.