Argonaut to expand after record profit

Perth-based stockbroking and financial services house Argonaut says it is about to embark on a period of significant expansion after reporting a record 142 per cent increase in profit over last financial year.

Argonaut released its unaudited financial results for financial year 2010/11 today, which showed an increase in revenue of 44 per cent and a profit of $15 million, up from $6.3 million in FY2009/10.

Managing director Eddie Rigg said the record profit came on the back of the strong performance of the resources sector, particularly over the past nine months.

He said there were a lot of resources-focused firms looking to raise capital over the period, and expected that to continue for the short to medium term.

Highlights of the past year for Argonaut were a $100 million on-market raid of Sandfire Resources for OZ Minerals, a $130 million capital raising for Ausdrill, a $30 million IPO for GR engineering and $93 million financing for the Merredin Power Station, Mr Rigg said.

As of June 30, Argonaut had no debt, with cash and investments totalling $40 million.

Mr Rigg said the firm was ready to announce a significant expansion plan within the next four weeks.

He said over the past six months Argonaut had been approached by a number of significant players, from major banks to rival stockbroking firms, about the possibility of a business combination.

“We’ve been looking at all sorts of expansion ops, we looked at whether we move over east, or do we just keep growing our Perth office?

“We’ve built up our balance sheet to $40 million, which is pretty good for a business which started up 10 years ago with $50K in equity, so we’re still considering our alternatives.

“We’ve been talking to some really big people offshore. I think our view is very much we don’t really want to go and play in Europe, and we don’t really want to go and play in North America.

“So that leaves us Asia, South America and maybe Africa, and at the moment we are very close to being able to announce a major expansion.”

Also today, Argonaut announced the appointment of former Market Equity chief executive Brent Stewart as a non-executive director and strategic adviser.

Mr Rigg said Mr Stewart’s knowledge of independent marketing and research would hold Argonaut in good stead in terms of providing a fresh perspective on growth strategies for the future.