Exco, the troubled money broker, held its dividend steady yesterday in the face of a 58 per cent slide in profits and persistent difficult markets. After slashing costs last year, the business is now on a stable base, said Carel Mosselmans, Exco's chairman. But he warned that levels of activity in the market remained unpredictable.
Mr Mosselmans, who will step down at the next annual meeting, to be replaced by deputy chairman David Hubbard, issued a strong profits warning last November, and said staff numbers would be cut from 1800 to 1500.
Formerly part of John Gunn's ill-fated British & Commonwealth group, Exco was floated on the Stock Exchange in mid-1994, only to run into the repercussions of the bad bond markets. As companies cut back on their exposures, Exco's money and fixed-income securities trading volumes were hit.
The company reported 1995 pre-tax profits down 58 per cent to pounds 18.3m. Operating profits plunged 64 per cent to pounds 14.3m. However the dividend was held at 9p.
The group took steps in the second quarter of 1995 to reduce costs in all aspects of the business. In addition to the 17 per cent cut in the workforce, salaries and benefits for many employees were reduced.
Mr Mosselmans said the aim of the exercise was to reduce the March 1995 cost base by pounds 15m in a full year, of which a significant part was achieved in 1995, without losing market share in key products.
"Some revenue was, however, sacrificed with the closure of non-strategic products," he said. Turnover dropped to pounds 208m last year from pounds 234m the previous year.
Exco's shares closed 10p higher yesterday at 117p.Reuse content