IFA Clarkson Hill, which resumed trading on AIM today, warns unless it receives an injection of capital from an outside party it will cease operations.
The national IFA, which has resumed trading today after its suspension for failing to publish accounts, says it is in discussions with several parties about an injection of capital.
"Currently the directors are in discussions with a number of parties and are confident that this objective will be achieved, however if it is not forthcoming the company may not continue as a going concern," it said today in its 2009 results.
The group reported an operating loss of £104,999 for the year (before exceptional items), compared to a loss of £645,095 for 2008. It said these losses reflected ongoing economic uncertainty, reorganisation and regulatory requirements.
Clarkson Hill also revealed it had to pay "significant" and "exceptional" costs of £230,787 following an FSA review into its processes in the second half of the year. Since independent consultants carried out a review into the firm's processes, revisions have taken place to bring these processes "into line", it said.
Its annual results show it paid £105,000 towards the £80m controversial levy covering the failures of Keydata, Pacific Continental Securities and Square Mile Securities.
The group also underlined the financial burden of RDR preparation as it establishes a recurring income model and phases out commission on pension sales and single premium investment.
It said from the period 2007 to December 2009 the impact of decreased initial commission against the present increase in trail caused a £300,000 plunge in gross profits.
"Whilst RDR will not be implemented until the beginning of 2013, it is essential that this preparatory work is put in place now," it said.
Meanwhile, its investment, pensions, mortgage and protection businesses were all down on last year, with its mortgage business particularly hard hit.
The company said mortgage-related activities decreased 47% down to just 8% of group income due to the "dramatic reduction" in house sales and remortgages.
Gross profit from frees mortgage fell from £624,187 for the 17 months ending 31 December 2008 to £245,107 for the 12 months ending 31 December 2009.
First time in history
Hymans Robertson’ Guided Outcomes
Our weekly heads-up for advisers
More than £167,000 raised
Beware ‘temporary’ vulnerability