Singer & Friedlander profits surge 41%

Singer & Friedlander yesterday vowed to remain one of the UK's last remaining independent merchant banks as it reported a 41 per cent surge in half- year profits to pounds 21m before exceptional items.

The profits growth was fuelled by investment management and the contribution from its new stockbroking activities.

John Hodson, chief executive, said the bank, cited as a bid target in the stock market last week, was not in merger talks with any financial institutions. "We're developing earnings per share growth which we are delivering to shareholders," he said.

Earnings per share, before exceptionals, rose 41 per cent at the half- year stage to 5.64p.

Banking analysts, though, said the bank might yet attract a buyer. "I don't discount it," said Martin Cross, analyst at Swiss bank UBS. But Mr Cross added that he had altered his recommendation on the stock from buy to hold after its recent "good run".

The share price ended the day 0.5p higher at 128.5p, just below its 129.5p year's high. The merchant bank plans to pay an interim dividend of 1.85p, up 15.6 per cent.

More diversified than others in its sector, Mr Hodson described Singer & Friedlander as a "financial services company'.

Profits at its merchant banking arm were steady at pounds 4.81m, compared with pounds 4.83m in the same period last year, but its stockbroking operations - including Swedish stockbroker Carnegie and British broker Collins Stewart - saw profits rise from pounds 7.36m to pounds 12.86m.

Mr Hodson said profits at Collins Stewart, which rose to pounds 4.22m from pounds 1.61m, were driven by activity on the Alternative Investment Market on which it is a sponsor of newly listing companies.

The bank now has pounds 4.7bn under management, up 56 per cent from June last year, helped by its appointment as investment adviser to Asset Backed Capital Limited, which has funds under management of more than pounds 1bn.

Mr Hodson hinted that the bank might look for a buyer for its 30 per cent stake in mobile phone retailer Peoples Phone, which was forced to pull a planned stock market flotation last year and into which analysts estimate the bank has channelled pounds 20m.

"As you look forward the [telecoms] industry is ripe for consolidation," he said.

He did not rule out selling loss-making insurance broker Edgar Hamilton, again pointing to consolidation in the sector.