Gerrard & National ends gilts operation

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Gerrard & National, the financial group, has continued the move away from its traditional discount house activities by closing its loss-making gilts market-making operation and buying the remaining third of its booming derivatives operation, GNI Holdings.

G&N's shares rose 39p as it announced pre-tax profits for the year to 5 April well ahead of expectations at pounds 25m, slightly lower than the pounds 25.2m in 1993. Analysts had expected around pounds 23m.

Two enormous institutions, Yamaichi and Merrill Lynch, have entered the gilts market-making arena in the past six months. But G&N's chairman, Brian Williamson, said the decision to shut G&N's own operation had more to do with its own redirection towards broking than new competition.

G&N's market-making arm had tended to lose money while its gilts trading had been profitable, and it would continue the latter, he said.

All five of G&N's main subsidiaries contributed to profits. The GNI futures and options broking subsidiary is the fastest-growing. Its pre- tax profits grew from pounds 600,000 in the year ended 31 December 1985 to pounds 12.5m in the 12 months to 31 January this year.

G&N is buying the remaining 32.4 per cent of GNI by issuing 8.5 million new G&N shares, valuing the minority at pounds 34.7m.

The total dividend, 22p, was covered for the first time by earnings from the broking division alone.

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