09/04/2008 - 22:00

Carmichael lifts profit

09/04/2008 - 22:00

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The buoyant stock market conditions that prevailed for most of 2007 have helped broking firm DJ Carmichael & Co achieve a big increase in profit.

The buoyant stock market conditions that prevailed for most of 2007 have helped broking firm DJ Carmichael & Co achieve a big increase in profit.

 

Carmichael’s parent company WHI Australia Pty Ltd achieved a net profit of $2.4 million in the year to 30 November 2007, according to accounts lodged with the Australian Securities and Investments Commission.

 

The unusual reporting period aligns with WHI’s 77 per cent owner, UK investment bank WH Ireland Group plc.

 

The profit was up 164 per cent on the $907,000 result in the previous year.

 

The higher profit was helped by a 66 per cent increase in revenue to $24.2 million. The firm also benefited from an eight-fold increase in ‘other income’ to $1.27 million, mostly from a net gain on derivate financial instruments.

 

“All areas of the business have performed well, particularly in the wealth management and corporate sections,” managing director Rod Beeton told WA Business News.

 

A guide to the relative performance of stockbroking firms is their profit relative to sales revenue.

 

In Carmichael’s case, the profit was equal to 9.9 per cent of its trading revenue.

 

This put it on a par with Perth’s biggest stockbroking firm Patersons Securities, whose net profit of $9.3 million in the year to 30 June 2007 was equal to nine per cent of its revenue.

 

Other major broking firms in Perth had substantially higher profit ratios.

 

Hartley’s net profit of $11.6 million was equal to 22.5 per cent of its revenue while Euroz’s net profit of $22.1 million was equal to 34.6 per cent of revenue.

 

The varied profit ratios partly reflect the different remuneration practices in the broking firms.

 

At Carmichael’s, more than two thirds of its total revenue was paid to staff, which is higher than at its main competitors. Carmichael is among Perth’s half-dozen biggest broking firms with a total of 37 retail investment advisers and seven corporate dealers.

 

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