Collins Stewart rise defies bank gloom

MID-CAP broker Collins Stewart Hawkpoint defied the gloom plaguing investment banks yesterday to post a rise in profits in three of its four divisions.

The firm posted a 29 per cent rise in pre-tax profit to £8.4m. Only its broking business saw revenues slump, by 11 per cent to £5.8m.

Chief executive Mark Brown told City A.M. that the broking environment is “difficult” due to subdued trade flows but added that the firm had grown its revenues in securities despite volumes dropping 10 per cent.

Brown said that the company’s “nimble” deployment of teams in specialist areas like listed investment companies had enabled it to post a 14.5 per cent rise in revenues to £57.6m, even as larger banks are slashing staff and seeing earnings drop in the same space.

Hawkpoint, the advisory business bought by Collins Stewart in 2006, saw revenues up by a fifth to £20.1m on the back of a flurry of private equity deals and a series of mandates won in Ireland to advise on restructuring in the financial sector.

The firm is also sitting on a £74m cash pile, which Brown says it is saving in order to take advantages of acquisition opportunities as they arise, particularly in wealth management and hiring workers laid off from struggling rivals.

“It’s a priority to shift towards wealth management – the quality of earnings is better than in other areas and the long-term dynamics are good,” he said.

Wealth management saw revenues rise 22 per cent to £27.6m.