Write-downs hit Euroz result

Perth finance house Euroz has reported a first-half loss as a result of weak conditions in its core stockbroking business and write-downs in the value of its listed investment companies.

The ASX-listed company has reported a net loss after tax of $6.6 million for the half-year to December 2014, compared with a profit of $12.4 million in the previous corresponding period.

A big factor in the reported loss was a $14.1 million write-down in the value of its holdings in listed investment companies Westoz Investment Company and Ozgrowth.

“In the 2014 financial year these investments performed well and were the major driver of our reported group profitability,” the company said in a statement.

“The first half of 2015 has seen significantly weaker commodity prices impact the share prices of WIC and OZG and is the cause for this unaudited first-half loss.”

The group’s underlying profit from normal activities was $3.5 million, down from $7.4 million previously. 

Euroz, which has consistently delivered better profits than most of its peers over the past decade, confirmed it would maintain its first-half dividend of 1.75 cents per share.

The company said its private client dealing team had lifted first-half trading revenue by 60 per cent, after absorbing Blackswan Equities.

In contrast, it said corporate finance revenue was “subdued” due to the low volume of capital raising activity.

Euroz was lead manager on 12 capital raisings last year, which raised a total of $466 million.

The amount attributable to Euroz was $264 million, ranking it number three on the BNiQ corporate finance league table for Western Australia-related capital raisings.

However, most of the capital raising transactions it worked on, including larger transactions for Aquarius Platinum, Sundance Energy and Amcom Telecommunications, were undertaken in the six months to June 2014.

In mergers and acquisitions it worked on just one transaction last year, as a financial adviser to Papillon Resources on its merger with Canadian company B2Gold.

The Papillon scheme booklet, released in August, disclosed that Euroz was paid $500,000 for its work.

Lead financial adviser Macquarie Capital was paid $2.5 million, while Canadian firm BMO Nesbitt Burns and Deutsche Bank were each paid $1 million.

Euroz is the third largest stockbroking firm in Perth with 43 client advisers, according to BNiQ research.