Merchant Securities, which owns Aim adviser John East, returned to profit in the second half of the year to March 2009 and remained in profit for the first quarter of this year.
The second half profit was £79,000 so the full year loss was £502,000 before write downs totalling £3.67m – mainly goodwill and intangible assets. The write downs also included a reduction in the value of investments of £396,000.
The overall loss rose from £778,000 to £4.58m. The NAV is just below £6m. At 7.25p a share, Merchant is valued at £3.4m, which is similar to NAV excluding goodwill.
There is cash in the bank of £2.15m. This cash could be used for small acquisitions or to finance the hiring of new teams.
The business of Merchant Securities Group will be transferred to John East so there is one regulated body, which will be called Merchant John East Securities. There will be cost savings from this move. There are 38 retained clients.
The new research publication Mercantalyst is helping to generate revenues.
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