Fri 30 Sep 2011
Panmure Gordon & Co. plc (“Panmure Gordon” or “the Group”) today announces its unaudited results for the first half ended 30 June, 2011.
• Total Group net income increased by 22% to £20.9m (H1 2010: £17.1m)
• Statutory loss reduced by 33% to £4.0m (H1 2010 loss: £6.0m)
• EPS loss reduced by 34% to -2.69p (H1 2010 loss: -4.10p)
• 55% of Group net income in the first half derived from ThinkEquity
• Investment banking revenue expected to be second-half weighted, despite continuing macroeconomic pressures
• 5 new UK corporate clients gained in the first half, and a further 9 since period end, taking overall number of listed clients to 77
• Top 5 UK Mid & Small Cap broker in 2011 Thomson Reuters Extel Survey
• Top 3 Broker, UK & Ireland, StarMine 2011
• UK investment banking completed 8 transactions in the half, with successful completion of a $25million IPO since period-end
• US investment banking completed 16 transactions in the first half
• Opened Singapore office
Tim Linacre, Group Chief Executive, commented:
“Despite very challenging market conditions we have reported improved first half results with the US business generating over half the Group’s revenue.
“In the UK, Panmure Gordon has gained 14 new corporate clients so far this year. In the US, a sharp improvement in investor appetite for technology-related stocks saw ThinkEquity post a very significant first half revenue improvement – investment banking revenue was almost four times that of the corresponding period in 2010. ThinkEquity’s investment banking pipeline is the strongest it has been since acquisition.
“We continue to expect investment banking revenue in 2011 to be second half weighted, although the effect of very recent extreme market volatility is unclear. The combination of improved US business performance, our growing UK corporate client list and our strengthening pipeline give us confidence for the future.
“With the full support of our major shareholder, QInvest, we are well positioned to capitalise on the rapidly changing landscape in our sectors. We see the opportunity to cement Panmure Gordon as one of the UK’s pre-eminent institutional stockbrokers and ThinkEquity as one of the leading US technology investment banking firms.”
Nathaniel Webb, Group Communications &
Investor Relations Director 020 7614 8333
Billy Clegg 020 7831 3113/07977 578153
Ed Gascoigne-Pees 020 7831 3113/07884 001949
Grant Thornton Corporate Finance (NOMAD)
Jen Hatter 020 7383 5100
Gerry Beaney 020 7383 5100
Chief Executive’s review
The market turmoil in which all stockbrokers and investment banks are operating is unprecedented in recent decades. Indeed this may be the worst operating climate for almost a century.
In recent weeks, we have seen a worsening of already hostile market conditions. While the causes of this include weak economic activity and sovereign debt concerns, some of the symptoms are low equity commission levels and a poor climate for investment banking transactions.
Against this background, there have been encouraging areas of progress within our businesses. We are positioning the firm to be able to take advantage of opportunities as they arise.
In the UK, we have two inter-linked areas of business: institutional equities and investment banking.
We are recognised as a leading corporate stockbroker and independent adviser and we have seen a continuing growth in our corporate client list. Having been appointed to 14 new clients this year so far, a net gain of seven, we now have 77 clients up from 65 at the end of the first half of last year. We see considerable opportunities to further grow our corporate client list over the remainder of the year.
The UK has continued to see very much reduced trading volumes. It has therefore been encouraging to see our institutional equities trading business in the UK produce an improved performance over the comparable period last year.
In research, we were pleased to be recognised once again as one of the Top 5 UK Small & Mid Cap brokers in the 2011 Thomson Reuters Extel Survey, and by StarMine as a Top 3 broker in the UK & Ireland.
Despite very difficult markets for investment banking, we completed 8 transactions for clients. We were pleased to lead the successful IPO of Escher Group at the start of the second half despite particularly volatile markets. Our investment banking pipeline remains encouraging and although it is dependent on market conditions for execution, we expect it to be second half weighted.
In the first half, ThinkEquity accounted for more than half the Group’s revenue. ThinkEquity has three business areas: investment banking, institutional equities and wealth management.
The main growth driver in the reporting period was investment banking. After several years of low activity levels, technology investment banking saw a rebound in the US in 2011. ThinkEquity has positioned itself as a leading independent technology investment bank and has been a beneficiary of this improved sentiment. ThinkEquity completed 16 transactions in the first half, including M&A deals, private placements, registered directs and IPOs.
As in the UK, institutional equities has suffered from industry-wide low trading volumes. While markets remain challenging, we have continued to strengthen the equities team and have seen an improvement in commission levels in recent weeks.
Since the period-end we have appointed a new and experienced president to lead the ThinkWealth Management team. We see opportunities to grow this business, leveraging the Group’s relationships and expertise.
During the period, the management of the Group was strengthened considerably by the appointment of Philip Tansey to the Board as Chief Financial Officer.
Since the end of the first half, market turmoil has increased further. We are working in unprecedented markets. Turmoil is likely to continue for some time, at least until there is some resolution to the sovereign debt crises.
US technology investment banking is one of the few sectors globally where there has been investor appetite and we are fortunate that ThinkEquity is now one of the leading firms in this sector. ThinkEquity’s investment banking pipeline is the strongest it has been since acquisition, though again execution of the pipeline is dependent on market conditions.
We continue to expect investment banking revenue in 2011 to be second half weighted, although the effect of very recent extreme market volatility is unclear. The combination of improved US business performance, our growing UK corporate client list and our strengthening pipeline give us confidence for the future.
With the full support of our major shareholder, QInvest, we are well positioned to capitalise on the rapidly changing landscape in our sectors. We see the opportunity to cement Panmure Gordon as one of the UK’s pre-eminent institutional stockbrokers and ThinkEquity as one of the leading US technology investment banking firms.
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