London stockbroker Panmure Gordon has turned a profit for the first time since coming under the control of former Barclays duo Bob Diamond and Rich Ricci, albeit just £3mn for 2021.
Diamond, who was chief executive of Barclays from 2011 to 2012, bought a majority stake in the 146-year-old merchant bank in 2018 along with the Qatari royal family. Two years ago he installed his former lieutenant Ricci, who ran Barclays’ investment bank from 2009 to 2013, as chief executive.
Panmure Gordon, which specialises in advising small and midsize UK companies, lost £28.6mn in 2019 and £5.4mn in 2020.
Ricci told the Financial Times the improvement last year was down to the firm nearly doubling its corporate client list since 2020, from 53 to 91, which led to revenue rising from £15.7mn to £48.3mn, its highest since 2009.
“The company is at a tipping point in terms of its operational leverage,” said Ricci.
Among the broker’s recent client wins are AssetCo, the investment management acquisition vehicle run by former Aberdeen Asset Management chief executive Martin Gilbert, and Ted Baker, the clothes retailer.
However, Ricci said Panmure Gordon’s revenues for the first four months of the year were behind its income for the same period last year.
UK stockbrokers have endured a tough start to 2022, with fellow mid-market participant Numis warning that investor fears over inflation and the war in Ukraine had sent activity levels in British equity capital markets to a near 10-year low.
Most companies seeking to raise money through a London listing paused plans, while dealmaking activity has been suppressed by doubts about the future of the UK economy amid spiralling inflation and energy costs.
Last month Numis said revenues for the six months to March would be more than a third lower than a year ago after trading was hit by the drop in activity in its investment banking division.
Diamond added that the problems stockbrokers were facing made it an ideal time to look for acquisitions.
“Now we are ready for consolidation — we are actively looking for opportunities,” Diamond said. “There is nothing imminent, but I would expect us to do something in the next 18 months.”
Diamond’s investment group, Atlas Merchant Capital, bought Panmure Gordon for £15.5mn at the start of 2018.
Diamond and Ricci — along with former acolyte Jerry del Missier — were known as the “three musketeers” of Barclays Capital, responsible for the rapid growth of Barclays in the boom years up to 2008, which culminated in a $1.75bn deal to buy Lehman Brothers’ US business out of bankruptcy.
Diamond and del Missier left Barclays in 2012 in the wake of a £290mn Libor-rigging fine, and Ricci left a year later.