King's shares fell 6p to 135p yesterday as it announced pre-tax profits sharply down from pounds 3.1m to pounds 762,000 for the six months to 31 October 1993.
David Pearce, chairman of King & Shaxson, said that since discount house profits depended on movements in interest rates, the previous half-year had been boosted by the UK's exit from the exchange rate mechanism while rate stability since then had hit profits.
'You are comparing a very mundane six months with a quite exceptional six months,' he said.
UK discount houses have been forced to seek a new role since the Bank of England decided to wind down their traditional business as an instrument for fixing interest rates.
Mr Pearce said that while King had already acquired a Stock Exchange moneybroker, which now contributed about a third of the company's income, it still needed 'another fee earner, so we aren't putting all our eggs into one basket'.
King is paying for the deal by issuing a total of 12 million shares, carrying restrictions to prevent sales and market placings. Of this total, 4.8 million will be issued three years after the deal is completed.
Greig Middleton was formed in 1982 by the merger of WN Middleton of London and RC Greig of Glasgow. Around 70 per cent is owned by its directors and employees. The German bank Landesbank Rheinland owns 10.53 per cent, while Bank of Scotland and a Welsh company, Graig Shipping, hold 5.26 per cent each.
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