Walker Crips issues profit warning as revenues drop 10%

Walker Crips Group has seen its group net revenue plummet 9.8 per cent to £3.39m from 1 October 2011 to 31 December 2011, which the firm has blamed on “weak” trading levels.

Walker Crips Asset Management, the firm’s asset management subsidiary, increased its core primary unit trust and UK-based funds under management by 8.1 per cent over the quarter to £612m at 31 December 2011, with fee revenues correspondingly higher.

However, during the quarter the last of WCAM’s non-core offshore funds with £131m of FUM, which are not managed by its managers Stephen Bailey and Jan Luthman, decided to move their administration in-house.

The move drove FUM at 31 December 2011 to decrease to £612m, from £698m in the previous quarter. WCAM said that these non-core funds contributed less than £66,000 of net fees per quarter.

Non-broking income as a proportion of total income over the quarter was unchanged at 61 per cent as the group continued to focus on reducing its reliance on volatile commission revenues, which fell by 28.7 per cent to £1.74m due to more subdued equity markets.

The group’s board warned that profitability for the year to 31 March 2012 will be “lower than expectations”, citing the reduction in overall FUM and the “continuing tradition conditions”.

It said in a statement: “However, the WCG Board believes that the group’s diverse product range continues to underpin its profitable resilience to the current challenging environment.”

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