ashcourt rowan in cash call as it reports losses

Ashcourt Rowan has announced a share placing to raise £8.5m in a bid to cut its cost base and pull the firm back into the black.

ashcourt rowan in cash call as it reports losses


Targeting annual cost savings of £5.2m, the company hopes to create a "best of breed" investment management proposition and to formalise arrangements in relation to certain assets managed under its Savoy brand.

The announcement came alongside the firm’s interim results, in which it posted a pre-tax loss of £1.31m in the six months to 30 September.

This poor performance was despite a 17% increase in group revenues to £18.38m in the first half, up from £15.69m in the same period last year.

Jonathan Polin, the company’s newly-appointed CEO, said: "Despite the considerable internal and external headwinds experienced by the business over the last six months, I strongly believe Ashcourt Rowan has the potential to become one of the leaders in UK wealth management over the next three to five years."

AUM were also up year-on-year to £3.93bn at the period end, from £3.39bn at 30 September last year, but had fallen from £4.46bn at the start of the half.

The chairman Kenneth West said a large part of the increase in revenue was due to the acquisition of the Co-Op IFA business in the second half of last year.

The sale of EPIC, the non-private client business which specialised in institutional asset management was completed in April and Ashcourt Rowan said £387,000 of losses could be attributed to that.

Nevertheless, it sees this as a delivery of its goal to refocus the business towards wealth management.

Polin said in his nine weeks at the firm he had been familiarising himself with the business and working on a strategy that could help the firm to compete in the wealth management space post-RDR.

This will include a realignment of cost structure, developing a centralised and scaleable operating platform and developing one single pricing card for the business.

The firm will also actively encourage clients to move their assets to its discretionary asset management services.

Polin predicted the firm will return to "run-rate profitability" over the next 12 months, but a number of exceptional items would prevent it reaching actual profitability over that period.

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