Lighthouse Group says mergers and acquisitions helped it boost revenue and gross profits in the first half of the year.
The company this morning reports a 15% increase in revenue from the same period last year, from £25.5m to £29.3m, while gross profit jumped £1m to £8.6m. EBITDA increased 3% to £526,000.
Lighthouse completed a merger with Sumus last year and, in January this year, acquired the client base of IFA Godfrey Pearson.
It says disregarding both deals, on a like-for-like basis revenues declined 21%, gross profits fell 13% and EBITDA dropped 45%. It cites as a reason a "significant" reduction in retail investment business following the economic downturn.
Operating costs increased, albeit marginally, to £1m also as a result of the merger of the Godfrey Pearson business.
Profit before taxation for the period was £56,000, down from £442,000 in H1 2008, as a result of a higher amortisation charge and the impact of near-zero interest rates on the net finance income available from the group's £12m gross cash balances.
Lighthouse Group executive chairman David Hickey says deals for Sumus and Godfrey Pearson have helped it increase recurring income levels.
During the first half of 2009, he says, recurring income rose to £7.2m from £4.9m and now represent a quarter of the company's revenues.
"Having anticipated weaker IFA revenues for the period, the board took a number of early cost reduction steps which have enabled the group to continue to trade profitably," Hickey says, adding the company is "well placed" to cope with any changes brought about by the RDR.
He says a decision by the High Court to allow the reduction of the share premium and merger reserve accounts to offset its accumulated losses as at 31 December 2008 will allow it to resume paying dividends to shareholders. It says an interim dividend of 0.2p per share is set to be paid next month.
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