WH Ireland has seen its losses narrow in the first signs its aggressive cost cutting and restructuring programme is bearing fruit, as it plots another fundraise and confirms more reshuffling at the senior level.
The beleaguered wealth manager was able to cut its losses down by 37% in the first six months to 30 September 2019 to £1.4m, an improvement on the £2.1m loss it reported over the interim period in 2018.
It was able to reduce its operating loss by half over the period to £890,000 compared with £2.1m last year.
Signs of recovery
WH Ireland’s shrinking losses is a major turning point for the firm which has been bleeding money as its bosses attempt to turn the business around in a challenging market environment.
The firm reported an “alarming” £11.3m loss over the previous year but CEO Phillip Wale and head of wealth management Stephen Ford (pictured) have been forecasting a comeback, telling Portfolio Adviser in July the £7.7m of cash on the balance sheet would be enough to turn the business around.
Wale said the latest interim results were evidence the group is making “significant progress in the first stage of its recovery,” adding the firm now had “a clear route to profitability from the start of the new financial year”.
“Wealth management has implemented its initial pricing alignment which, together with a continuing robust performance from our corporate business and an ongoing focus on cost, underpins our confidence in a return to profitability,” said Wale.
Revenue over the period declined 11% to £11.4m from £12.8m, while assets under management fell 8% to £2.3bn. WH Ireland said weaker performance in these areas was down to choppy markets.
Another fundraise in the pipeline
In addition to its aim to return to profitability by the start of the new financial year, the group said it is planning another fundraise.
It is seeking to raise a minimum of £2.5m via an accelerated book build process which, if successful, will be put to shareholders for approval at the next general meeting.
Wale said the placing would provide the wealth manager with a “significant buffer” to its minimal capital requirement and create a “transparently robust capital position” from which the company can grow.
“This placing, along with our anticipation of a return to monthly profitability by the start of the new financial year (and management internal forecasts indicate a £1m loss before exceptional items for the 12 months ending March 2020 on a projected revenue of £23.2m, subject to market conditions) will strongly position the group to exploit the opportunities available to it over the coming months from both a transactional and a recruitment perspective,” said Wale.
More board changes
In a separate announcement the wealth manager confirmed chairman Tim Steel would be succeeded by current board member Philip Shelley.
Shelley joined WH Ireland from Arlington Capital Markets in July and serves on the group’s audit, risk and remuneration committees. At the time the ex Goldman Sachs banker was brought on board WH Ireland touted his 24-year career advising and raising equity for a wide range of UK public and private companies.
Alongside Shelley’s appointment, WH Ireland revealed head of wealth management Ford had been appointed as an executive director of the company. The City fixer upper, best known for his work revitalising Brewin Dolphin’s business, joined WH Ireland in December 2018.
Both appointments are subject to regulatory approval.
