Sliding exchange volumes trigger warning at Exco
Friday 24 November 1995
Exco, the moneybroking group, suffered a 21p fall in its share price to 120p after warning that full-year profits would be "markedly below market expectations." Last year's flotation price was 175p.
The company has been hit hard by falling foreign exchange volumes and has already cut 150 jobs this year. Carel Mosselmans, chairman, said Exco expected to report a fall in turnover in the full year similar to the 13 per cent decline reported for the six months to 30 June. He added that, since his cautious half-year report, volumes in wholesale financial markets had fallen further.
Exco has already taken restructuring action with the aim of cutting total operating costs by pounds 15m in a full year. It said it expected an exceptional cost of pounds 4m in the current year from the measures. It will maintain its final dividend of 6p, making a total of 9p for the year. This puts Exco on an historic price-earning ratio of 11 and a gross yield of 9 per cent.
Analysts downgraded their forecasts for full-year profits from pounds 27m-pounds 29m to pounds 16m-pounds 19m. Robert Mumby of BZW said: "It's a bit dire. The scale of the decline in revenues in the second half is pretty devastating. It has recovery potential next year."
Simon Whittock of Merrill Lynch said Exco was suffering from two things. "The foreign exchange industry is undergoing a structural change from voice-based traders [such as Exco] to screen-based ones like Reuters. Secondly, the banks are not letting their traders wheel and deal in the way they did in the past before the Barings disaster."
Peter Edge replaced Ron Sandler as Exco's chief executive in October 1994. Mr Sandler - now chief executive of Lloyd's of London - left with a pounds 297,000 pay-off three months after he floated the company out of administration. Exco had been part of the British & Commonwealth financial conglomerate that failed at the end of the 1980s.
- 1 Finland schools: Subjects scrapped and replaced with 'topics' as country reforms its education system
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 Watch: Man takes selfie every mile of 2,600 mile hike, creates amazing timelapse video
- 4 The day I starred in Only Fools and Horses
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings plane crash: Co-pilot Andreas Lubitz 'sought treatment for eyesight problems'
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
#FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Yemen crisis: Saudi Arabia ready for long campaign against Houthi rebels across the border
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Revealed: Putin's army of pro-Kremlin bloggers
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...