Merchant reports losses as Sanlam takeover approved

Merchant Securities has confirmed that its proposed takeover by Sanlam has been accepted by over 94 per cent of shareholders, as it reported £240,000 of statutory losses for 2011 .

On 31 October, Sanlam UK Limited offered to buy the ordinary share capital of Merchant Securities for £12.2m. The offer has now been declared “wholly unconditional” after having been accepted by more than 90 per cent of shareholders.

As a result, the company is applying to the London Stock Exchange for the cancellation of the admission to trading on AIM of Merchant Securities’ shares.

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Merchant Securities, which provides wealth management services to individuals and investment banking services to UK small and mid-cap companies and institutional investors, has reported today (15 December) that its revenue was up 13 per cent to £4.3m for the six months to 30 September 2011.

Its wealth management activities contributed £2.25m of revenues to this, up 7 per cent compared to 2010, with investment banking contributing £2.10m, an increase of 21 per cent.

However, as a result of a steep rise in general administrative expenses from £3m to £3.9m the firm reported an underlying loss before tax of £35,000 compared to an underlying profit of £342,000 in the same period of 2010.

Merchant said these underlying figures are stated before amortisation of intangible assets and non-recurring items. On a statutory basis, the loss before tax was £240,000 and the loss per share was 0.46p.

John Green, non-executive chairman, claimed that the acquisition of GT Independent Financial Advisers Limited in February 2011 represented another “step forward in our strategy” to build our wealth management activities.

He said: “The acquisition has more than doubled the group’s assets under advisory and discretionary management, with the total rising to approximately £421m from £205m as a result.

“During the period, we completed the integration of GT within the Group and we are now focusing on the cross-selling opportunities that are available. With GT adding some new 3,300 private clients, we see excellent scope to offer our wealth management products and services to these newly acquired clients.”

Mr Green added: “On behalf of the board, I wish to thank all staff who have contributed to the Group’s good performance in the period. As we enter a new phase of growth as part of the wider Sanlam Group, I believe that the company is very well placed to achieve its growth ambitions.”