Stock brokers warn of gloomy outlook

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The Independent Online

The niche stockbrokers Teather & Greenwood and Numis Corporation gave a gloomy assessment of the corporate finance industry yesterday, warning that the outlook for next year remained impossible to predict.

Shares in T&G fell 11 per cent to 107.5p after it posted a 70 per cent fall in first-half pre-tax profits to £1.12m and warned "current stock market conditions make predictions for the second half difficult". The company, which specialises in small company flotations, has been forced to retrench by the slump in new issues following the boom in 1999/2000.

Brian Rowbotham, the finance director, said that visibility of new business remained poor, although the company was comfortable with forecasts of £3m profits for the full year. "We have deals in the pipeline but this is a difficult time," he said.

The share price fall was largely attributable to the illiquid nature of T&G's stock, he added.

Numis said it was "cautious" in view of prevailing market conditions. "Personally, I don't see things picking up for some time," said Oliver Hemsley, the chief executive. The company is still looking to recruit, in particular to build on its expertise in the insurance sector. "We are not going to be irrational about hiring, but it is sensible to recruit good people when everyone else is retrenching," he added.

The company's maiden full-year results disclosed a £1.55m charge relating to the recruitment of executives. Staff numbers increased from 25 to 45 last year. Grouprevenues from continuing operations fell from £9.4m to £6.6m, while pre-tax profits sank from £5.96m to £306,400. But there were signs of life yesterday in the Alternative Investment Market, which saw a record five companies debut. Cabouchon Collection, Expomedia, Inditherm, Stagecoach Theatre Arts and Telford Homes raised £14m between them.