CompaniesMay 14 2013

Towry posts £9.4m profit despite £3m restructuring costs

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ByDonia O’Loughlin

Towry has posted a £9.4m pre-tax profit for 2012, a 14 per cent jump on 2011, despite incurring £6.8m in exceptional costs throughout the year, largely due to restructuring costs and the Financial Services Compensation Scheme levy.

Towry’s annual results revealed that pre-tax profits increased 14 per cent from 2011 and exceptional costs also increased 52 per cent from £4.48m to £6.8m in 2012.

Restructuring costs amounted to £3m in 2012, compared to £854,000 in 2011. The firm was also faced with an FSCS levy of £1.8m and £432,000 for “exceptional regulatory costs”.

The levy charged for 2012 relates principally to the failure of Keydata Investment Services and MF Global and was “significantly higher than would ordinarily be expected”. Towry said that it had “no involvement” with either of these companies.

The firm also paid out £171,000 in litigation costs in 2012, which is a result from the firm’s unsuccessful court case against Raymond James and seven former Edward Jones’s advisers, as well as a £1.4m in professional fees. In 2011 Towry spent £2.3m on litigation costs.

Gareth Corbett, chairman, also hinted that Towry is on the acquisition trail.

He said: “Within the wealth advice community, small firms (which make up the bulk of the industry) have typically focused on managing clients on a commission basis rather than developing new fee based business models, whereas larger firms face challenges around legacy systems.

“As a result we are seeing, and will continue to see, an increasing number of owners of businesses looking to sell or consolidate with bigger players.

“Towry is well placed to benefit from ongoing change in the industry and to act as a consolidator using its management expertise, business model and operational infrastructure to transition profitable financial advisory businesses to the new regulatory environment.”