Birmingham stockbroker Arden Partners is in prime position to take advantage of the recession despite seeing its profit from operations drop more than 80 per cent over a year.
Chief executive Jonathan Keeling said the firm’s decision to concentrate on improving cash supply rather than spending on operations meant it was in a good position to expand.
And he said mass layoffs in the financial industry meant there were hundreds of incredibly talented people that could be picked up.
“It’s all about cash,” said Mr Keeling. “The year was obviously a very challenging one, and I think the most important thing is we remained profitable for the full year. The thing we have focused on is managing and protecting our cash, and we have grown our cash to £9.5million. As a stockholder, you have a requirement to the FSA to keep a certain level of cash. Ours was set at £2.5million and we are holding more.”
Pre-tax profit at the firm to the year ending October 31 fell to £1.4million at the Edgbaston stockbroker as the market dried up, compared to £5.2million a year before. This was based on revenue of £11.4million, significantly down on 2007. It raised just £75million for clients, compared to £205million the year before. Arden Partners was founded in 2002, at the bottom of a bear market, and Mr Keeling said this early experience had been invaluable. He said the firm would be carefully considering expansion.
“Despite difficult trading conditions we have an extremely secure business model so we have the opportunity to really move through these difficult times and make sure we are left standing at the end of the bear market,” he said.
“Because of the difficulties in the financial services industry, with people leaving Lehman Brothers and Bear Stearns and the like, there are a lot of very, very good people available to employ. We can conservatively look to recruit high calibre individuals who are instantly revenue generating. It’s much more competitive for an employer to employ in this market.
"We are looking at getting into construction where we don’t have any experience, but it will ultimately be whatever sector is the most revenue generating. The experience at the start of Arden’s life definitely did help us because we are probably not as fazed by it all as some others. While we don’t like bear markets we are used to them and they are an opportunity. We are solvent, we are healthy, and we want to push as hard as we can to get more revenue.”