STOCKBROKING firm Patersons Securities has joined its listed competitor Euroz Securities in achieving a bumper profit in the second half of 2004, as it benefits from the strong stock market and growth in capital raisings.
STOCKBROKING firm Patersons Securities has joined its listed competitor Euroz Securities in achieving a bumper profit in the second half of 2004, as it benefits from the strong stock market and growth in capital raisings.
In a prospectus for a $1.9 million capital raising, Patersons has disclosed revenue of $30.4 million and a net profit after tax of $2.3 million for the five months to the end of November 2004.
The prospectus does not have comparative figures. However the five-month data indicate Patersons, an unlisted public company, is performing even better than it did in the year to June 2004, when the firm achieved a big lift in both revenue ($47.7 million) and net profit ($3.3 million).
The disclosure of Patersons’ profit figures follows Euroz’s recent announcement of a $4.4 million net profit for the half-year to December, an increase of 30 per cent over the previous corresponding period.
Patersons and Euroz are widely recognised as the market leaders among Perth-based stockbroking firms, and they were the dominant local brokers in WA Business News’ recent equity capital raising survey.
The latest results from another listed stockbroking company, Tolhurst Noall, which has a branch in Perth, suggest that not all brokers have benefited equally from the current boom.
Tolhurst announced that it expects to report a pre-tax profit for the half-year to December of $1.45 million, excluding a one-off write-down of $100,000 from the sale of its funds management business.
This is down from its pre-tax profit of $1.65 million in the previous corresponding period, excluding a one-off $627,000 profit.
Patersons is raising $1.9 million through a rights issue (at 50 cents per share) and options issue (at 10 cents per share) to boost its working capital.
The company could raise a further $4.1 million from the exercise of the options, which can be exercised at 50 cents per share and expire in five years’ time.
“Given the increased size and geographical reach of Patersons and the level of daily business now being transacted, the board has deemed it appropriate to increase the capital base of the company,” executive chairman Michael Manford writes in the prospectus.
The prospectus says the extra capital will enhance the ability of the company to expand by employing additional staff and opening new offices “as and when opportunities arise”.
The past three years has been a period of rapid growth for Patersons, after management bought out 50 per cent shareholder JP Morgan and continued its interstate expansion.
The firm now has 10 offices, including those in Sydney, Melbourne and Canberra, and 240 staff, double its staffing level of three years ago.
Executive director Aaron Constantine said the company presently had 66 shareholders, all members of staff, and the 1-for-14 rights issue offered an opportunity for other staff to acquire an equity stake.
