Euroz Hartleys posts ‘modest profit’

WA corporate finance firm Euroz Hartleys has reported a modest profit off the back of two years of subdued markets but has capitalised on major block trade activity within the lithium sector.

In a statement to the ASX, Euroz Hartleys said it expected an unaudited net profit after tax of about $1 million for the six months to December 2023, down 66 per cent compared to the prior period.

The firm said the past two years of subdued markets, low trading and equity capital market (ECM) volumes were having a significant short-term effect on all market facing financial services players.

But the firm, which recently moved into QV1 tower on the Terrace, said although there were different market influences, most would agree that peak interest rates and inflation were “mostly behind us”.

Euroz Hartleys said low ECM and Initial Public Offering (IPO) activity continued to be the trend, having a “major effect” on its own capital raisings totaling $496 million, down from $667 million in the prior corresponding period.

But it said the forward-looking ECM pipeline currently appeared “somewhat more promising”.

Its transactional brokerage revenues were up 26 per cent on the back of strong block trading activity for the likes of Gina Rinehart’s Hancock Prospecting.

Within the Liontown Resources raid, Euroz Hartleys orchestrated about 25 block trades costing Hancock about $1.51 billion worth of stock to become the largest shareholder on the register of the Kathleen Valley developer.

Euroz Hartleys’ Perth corporate finance team also executed Hancock’s block trades to acquire its stake in takeover target Azure Minerals, and separately worked on the trades in gold company OreCorp.

To read more about the block trades orchestrated by Euroz Hartleys and the emergence of a new style of strategic investor, read the latest edition of the Business News magazine out today.

In today’s ASX statement, Euroz Hartleys said it could report a modest increase in its funds under management to $3.67 billion as of December 31, 2023, up 5.7 per cent.

Despite the modest results, Euroz Hartleys has declared a first half dividend of 1.75 cents per share fully franked, according to the ASX statement.

“Slower markets will always have a major effect on our transactional business, but it also reminds us of the importance of our recurring wealth and management revenues,” executive chairman Andrew McKenzie said.

“Euroz Hartleys believe both of these types of revenue comfortably co-exist and this diversification of revenue give us strength during downtimes and significant upside in better markets.

“During this downturn we have invested significant time and effort in building our brand and platforms in both our traditional stockbroking business and in our premium wealth management offering.”

The firm moved into its new headquarters in the QV1 tower on St Georges Terrace towards the end of last year, following Euroz’s acquisition of Hartleys in 2020.