Terry Smith broker gears up for revival
STOCKBROKER Collins Stewart yesterday signalled tentative signs of recovery as it confirmed a slew of new senior hires, despite posting a 36 per cent plunge in profits for the first half of the year.
Collins Stewart, chaired by City veteran Terry Smith, said pre-tax profits fell to £6.1m, down from £9.6m in the first half of 2008. Revenue grew to £95.3m, from £89.2m last year, though the firm said this was partly a reflection of favourable US dollar exchange rate movements.
But the group said efforts to refocus the business towards its core strengths had started to bear fruit, notably the decision to close its loss-making US corporate finance arm.
New chief executive Mark Brown confirmed a number of high-profile hires across the securities division and the appointment of Dresdner Kleinwort’s former senior broking adviser Julian Smith to strengthen its corporate broking activities.
And Collins Stewart also defended its decision to continue paying hefty bonuses despite the recession, saying: “In spite of deteriorating markets, it has been necessary due to competitive pressures over the retention and recruitment of staff to maintain overall bonus levels in the first half above those previously anticipated.”
The group added that revenue in the second quarter had risen by 27 per cent compared to the first quarter, though management remained guarded about any future upturn.
“The outlook remains uncertain and we will continue to take a cautious approach to managing the business with an emphasis on financial strength,” said Smith.