AT first glance, all of Perth’s major stockbrokers posted dismal results for the year to June 2012.Their profits were down, in some cases tipping into the red; but on closer inspection some of the financial results were surprisingly strong.Euroz led the way with a pre-tax operating profit of $17.7 million. For a business with just 64 staff and total revenue of $98 million, that’s a remarkable return. It looks slightly anaemic, but only in relation to the previous year’s stellar profit.Hartleys also had a good year with a pre-tax profit of $14.5 million.With 101 staff, Hartleys continues to be a highly profitable business. And like Euroz, its latest profit is lacking only when held up against the previous year’s $25.2 million result.Argonaut posted a modest operating profit of $2.9 million last financial year, well below the previous year’s $12.3 million.However, its ability to stay in the black was a lot more than could be said for most of its rivals.Western Australia’s largest stockbroking firm was among many that incurred an operating loss.Patersons Securities reported a pre-tax loss of $7.1 million following a 28 per cent dive in revenue to $106 million.Against the backdrop of falling trading volumes and reduced capital-raising activity, Hartleys chairman John Featherby said the firm’s result was very pleasing.He also noted that Hartleys staff numbers had remained steady, in contrast to the redundancies and cuts elsewhere.In a similar vein, Euroz managing director Andrew McKenzie described the 2012 result as better than almost all of its competitors, large or small, and therefore “one of our best ever”.Argonaut managing director Eddie Rigg said the tough trading conditions had continued into the current financial year.“It’s like running on beach sand; we are getting ahead but it’s hard work,” he said.Mr Rigg said Argonaut was continuing to invest for the future, with the firm maintaining its team of seven researchers and planning to lift its dealing team from 12 to 20 over the next year.In contrast, Patersons has been cutting its cost base, which is a reflection of its national expansion and network of offices around the country.Chairman Mchael Manford said the company achieved savings of $6 million last year but this was not enough to keep the firm in the black.Its staffing has fallen sharply, with national staff numbers falling from 520 last year to 445 currently.Patersons’ poor year was matched, or exceeded, by most of its national rivals.Bell Financial Group has reported a net loss of $1.8 million for the half-year to June 2012, while Wilson HTM has reported a loss of $7.6 million for the full year to June.The downturn is also triggering industry rationalisation, with Austock Group selling its loss-making Austock Securities business earlier this year to Intersuisse.After the sale, Austock declared losses of $10.7 million from the securities business.Further charges are in the offing, with Mariner Financial lobbing a $24 million takeover offer for Wilson HTM last month.The distorting effect of modem accounting standards caused frustration for many in the industry.At Argonaut, for instance, its small operating profit turned into a net loss after writing down the value of trading securities by $ 14.4 million.Yet in the previous year, its net profit was artificially boosted after revaluing its trading securities upwards by $16.1 million.Mr Rigg said both figures were meaningless because the ‘trading securities’ are still held at a profit (compared to their acquisition cost) and the group intends to hold them as long-term investments.Annual accounts at Euroz show revenue from principal trading jumped from $9.5 million to $45.9 million; that lifted total revenue by 41 per cent to $98 million.However executive chairman Peter Diamond attributed the spike to the quirky impact of accounting rules, saying there had been no change in the group’s trading policy.
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