KPMG 'uncertain' over Charcol's future

The revelation that John Charcol's auditor, KPMG, is uncertain over the firm's future has cast doubt over previous speculation that the brokerage could fetch £50m upon sale.

The company's recently-published 2006 accounts contain a note from KPMG, who said there was a "material uncertainty" over the firm's ability to continue as a going concern. A report showed directors John Garfield, Jon Moulton and Charles Wishart collectively pumped £1.5m into the business between the end of December 2007 and early January 2008 as an interim measure before either a sale or refinancing involving existing investors. The accounts reveal £820,000 of loans due to have been repaid in June 2007 have been deferred to April 2008 and the brokerage made a net loss in 2006 of £41,000.

When John Charcol announced it was up for sale in January, the £50m pricetag for the firm came up in press speculation, but the brokerage never endorsed this valuation. John Charcol was founded in 1974 and bought by Bradford & Bingley in 2000. In December 2004 a management-led consortium backed by original founders John Garfield and Charles Wishart bought back the company for a rumoured £5m.

Drew Wotherspoon, head of communications at John Charcol, said: "As can also been seen from the 2006 accounts, additional money totalling £1.5m was invested in the company from the major investors who remain committed to ensuring a successful future for the business. This was very much always part of their plan."

Paul Reynolds, managing director of Scottish brokerage MoneyQuest, which recently sold a majority stake to ex-Egg chief executive Paul Gratton, said: "The loans show the loyalty and focus of the directors as they have put in their own money, which shows their commitment to turning the business around."