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Arden Partners

  • BY: Andrew Hore |
  • POSTED: 13/01/2009 |

Aim adviser Arden Partners is preserving its cash in order to take on highly rated people during the tough times.

Chief executive Jonathan Keeling says “it is what you do in difficult markets” that is key to prosperity when there is an upturn. Keeling is keen to add “good people”, or maybe even teams, to the company. He believes that this is the best way to expand. Arden could buy a rival business but this brings with it added problems.

If an individual does not work out then they can leave. Buying a company risks culture clashes and if a takeover proves a mistake it can’t be unwound.

It is certainly in a strong position. Regulatory capital requirement is cash of £2.2m and there was £9.5m in the bank at the end of October 2008. Less trading and reducing the holdings of the market making business helped cash flow back into the business.

No final dividend is being paid. An unchanged interim of 2.2p a share was paid last year. Arden likes its dividend to be covered at least twice by earnings and it wants to see how this year goes before making a decision on reinstating the dividend.

Overall revenues declined from £16.8m to £11.4m, while underlying profits – excluding bid costs and share based payments – fell from £5.5m to £2.1m.

Revenues from both AIM and Main Market new issues and fund raisings fell sharply, while M&A revenues grew. 

The majority of the profit was made in the first half but Arden was still profitable in the second half. It has cut around £500,000 a year off of its costs by making 10% of its staff redundant. New appointments may offset some of these savings.

Keeling says there is work lined up that provide a strong first half’s trading but with the stock market as it is it is better to assume that much of that will be deferred until there is a recovery.

At the moment it is almost impossible to float a company and raise money for it. Secondary financings are also difficult. There are a couple of fund raisings that were planned during last year and still have not been completed. There could be more M&A activity but that is still partly dependent on the strength of the market.

The shares were unchanged at 46p each, which values Arden at £11.4m.

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