The stockbroker where David Cameron's father worked lost £16.7 million last year
The City of London stockbroker made a loss of £16.7 million last year, according to results released on Thursday, largely down to a goodwill impairment of £13.2 million. What that means is accountants looked over its books and realised that some assets were valued too highly.
Even with the writedowns stripped out, Panmure made a loss of £4.1 million from normal operations, down from a £2 million profit in 2014. Revenue from corporate finance and other fee income down 38% to £12.8 million.
Three generations of Prime Minister David Cameron's family were senior partners at Panmure, according to the Guardian, most recently his father Ian Cameron. Cameron's father became a partner aged just 30 and specialised in bonds.
Panmure relies on market activity such as stock market listings and secondary share offerings. But a market tightening in the second half of 2015, following a major stock market collapse in China in August, led to a slowdown in this kind of activity, with companies too scared of market volatility. The UK election and uncertainty in Greece in the first half of last year also hurt.
CEO Patric Johnson says in the update (emphasis ours):
2015 was a disappointing year with regards to our primary markets activities. However, our institutional securities business performed well, we successfully completed the acquisition of Charles Stanley Securities in July 2015, increased our corporate client base to 152 from 123 and we remodelled the business with our corporate-led, sector-driven approach and this strategy is already yielding results.
We took the decision to write off the outstanding historic accounting goodwill of £13.2m on the balance sheet, which dates back to 2005, and start 2016 with a clean slate. This results in a statutory loss of £16.7m and a clean and transparent balance sheet going forward. I should make it clear that the relevant impairment charge of £13.2m is non-cash accounting item and has no impact on regulatory capital or on the ongoing operations of the business.
Johson says 2016 has started "positively" with cost cutting and 14 deals leading to a profit. But he adds: "We are under no illusion as to the potency of the dangers that lie ahead of us this year and the external factors that will weigh heavily on the fund raising opportunities in our market."
2016 has so far seen increased volatility in stock markets around the world, a further blow to market activity. The looming referendum over Britain's membership of the European Union is only adding to uncertainty, meaning many companies are unwilling to undertake any stock market activity.
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