Walker Crips profits down 40%

Walker Crips Asset Management reported a drop in pre-exceptional profits before tax of almost 40 per cent in their financial year end results, despite a slight increase in revenue.

Although total revenue was up 1 per cent to £20.31m, profits plunged 39.9 per cent to £1.06m.

David Gelber, chairman of Walker Crips Asset Management, attributed this decline to a combination of higher shared commission paid and increased overhead costs.

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He said: “The group incurred significant legal and other professional costs during the period, mostly relating to the disposal of WCAM.

“Although this transaction was completed post the period end, accounting standards require the expensing of such costs as they are incurred. The board has accordingly treated these expenses as exceptional.”

In light of these less-than-optimal results, he maintains the company is in a healthy position with net assets of £13.8m, compared with £14.7m on 31 March 2011.

Cash balances were £0.93m at the end of the period, which Mr Gelber said reflected “a temporary sharp fall relating to the settlement of unusually high-value client trading just prior to the period end”.

However, he added cash balances have since returned to “more normal” levels.

Overall working capital held at £6.9m compared with £7.1m on 31 March 2011.

Mr Gelber said: “While WCAM increased its core funds under management over the period, total funds under management declined. Trading conditions over the period were generally difficult and relatively low equity market volumes were reflecte in our trading performance.

He added that investors lost confidence due to continuing troubles in the eurozone.