Collins Stewart subdued at halfway

Collins Stewart underscored the persistently tough conditions facing London’s stockbrokers with another subdued performance in the first half of the year.

Revenue across the group remained broadly flat at £96.1m in the six months to June 30, a period that saw the end of an era when Terry Smith, the veteran City operator, stepped down as chairman.

Shares in the FTSE 250 company, one of Britain’s biggest independent broking houses, fell 2¼p to 72¾p.

Sales garnered from its UK securities operation fell from £27m to £21.1m, highlighting the difficulties facing City brokers in mounting a recovery from the financial crisis.

“It’s all about self-help,” said Mark Brown, chief executive. “I think the results show that Collins Stewart is nearing the end of the turnround phase. The next phase is the growth phase.”

All four of the group’s divisions reported an operating profit during the period, including Hawkpoint, its advisory arm, which endured a £700,000 loss in the first half of 2009.

Mr Brown said Hawkpoint was “well placed to take advantage of a wave of corporate restructuring”.

Pre-tax profits at Collins Stewart, which last year abandoned ambitions to become a global investment bank to focus on its core businesses, rose from £6.1m to £6.5m.

Fundraisings during the period included those for HarbourVest, one of the biggest private equity fund-of-funds, and Development Securities, the property developer and investor. However, overall corporate broking revenues fell £8.8m to £6.5m.

The interim dividend is held at 1.3p, which analysts at Arden Partners said was “disappointing”.

Net cash at Collins Stewart, which has about 70 corporate clients and employs some 750 staff, stood at £75m at the end of June.

At the group’s wealth management arm, the acquisitions of Corazon and Andersen Charnley contributed to a 36 per cent rise in assets under management to £6.8bn.

Mr Brown said the group would consider further deals in the sector, although these were unlikely in the immediate future as the recently acquired businesses were integrated.