Perth-based stockbroker Patersons Securities Ltd has changed its corporate structure to allow for external investment in the firm after it posted a 2006-07 net profit increase of 82.3 per cent to $9.3 million.
Perth-based stockbroker Patersons Securities Ltd has changed its corporate structure to allow for external investment in the firm after it posted a 2006-07 net profit increase of 82.3 per cent to $9.3 million.
The significant profit jump follows a decision by Patersons to formally change its constitution to allow non-Patersons employees to buy shares in the company.
Patersons chairman Michael Manford said the move would make it easier for the stockbroker to float on the Australian Stock Exchange or for it to develop a strategic relationship with a third-party.
Mr Manford said Patersons was not in discussions with a third-party investor.
Patersons was earlier this year linked to discussions with French bank Crédit Agricole however WA Business News understands those discussions have ended.
Mr Manford would not comment on the discussions.
He said "three or four investors" outside of Patersons employee-base now own about 1.25 million shares in the company, or about 2 per cent of the company's issued stock. The directors of Patersons own about 68 per cent while about 130 employees own the rest.
Mr Manford and Patersons director and head of corporate finance Aaron Constantine hold about 16 per cent of the company's shares.
Both men said today they had no intentions to sell their shares to external investors.
"We are here for the journey," Mr Manford said.
"We like owning our shares and we are here for the business."
Mr Manford said there were three options available to Patersons - to link up with a strategic partner, stay as it was or it could list on the Australian stock market.
Mr Manford said changing its constitution made it easier to list on the market or bring in outside investment.
He said his preference would be to list the company.
Patersons' revenue for the year jumped 33.5 per cent to $102.7 million, after raising about $1 billion in new equity during the 12 months to June 30, Patersons revealed today in a statement.
Its accounts are yet to be lodged with the Australian Securities & Investments Commission.
Patersons said it achieved growth across all its divisions, including retail stockbroking, corporate finance and funds management.
Patersons' profit increase comes as the firm returns its focus on growth after spending the past two years strengthening its management team and compliance processes in the wake of an Australian Securities & Investments Commission investigation into inappropriate and risky dealing at its Canberra office.
Mr Manford said for the past two years the business had put aside "strategic initiatives" to concentrate on its compliance processes.
He said the business was now ready to return to developing its growth ambitions.
This will include opening an office in Brisbane by the end of the year provided it can find the right site and recruit the right people.
The full text of a Patersons announcement is pasted below
Stockbroker Patersons Securities Limited (Patersons) is pleased to announce a net profit of $9.3 million for the year to 30 June 2007, an increase of 82.3%.
Revenue for the year was $102.7 million, a 33.5% increase over the previous corresponding period.
The increase in business activity is in line with Patersons' long-term growth, with the firm growing its revenues an average of 35.5% over the past 8 years.
The FY07 result was underpinned by strong performances from all Patersons divisions and healthy activity across the Australian share market.
Patersons offers services in retail and institutional stockbroking, corporate finance, and funds management and administration.Through the 2007 financial year, Patersons raised circa $1 billion of new equity in almost 100 new equity issues consolidating its position as the most active arranger of new equity in Australia by number of new equity issues and a top 10 arranger by value*.
In retail and institutional stockbroking, Patersons continued to build its national business base, with more than 156 dealing representatives servicing 112,000 clients from 9 locations across Australia.
Patersons Chairman Michael Manford said the result was pleasing and reflected the firm's strong commitment to quality people, research and service offerings.
"Patersons now has an outstanding platform from which to build our national presence in all aspects of stockbroking and we see continued strong growth in the time ahead," he said.
"We also plan to launch a number of new initiatives through the 2008 financial year to our range of products and services for retail and institutional clients.
Mr Manford said the 2008 financial year had started well with Patersons experiencing an increase in revenues for the September quarter over the previous corresponding period .
