Panmure Gordon sees 'meatier' second half as IPO activity picks up

Reuters

By Richa Naidu

(Reuters) - Panmure Gordon & Co Plc (LSE:PMR) said it expected a "meatier" second half as IPO activity in Britain picks up and the investment bank and stockbroker reins in costs.

The 137-year-old company, which advises more than 110 London-listed companies ranging from FTSE-100s to small caps, worked on three share listings in the first half of 2013, including the 1.54 billion pound ($2.47 billion) offering of life insurer Partnership Assurance Group (PA.L) in June.

"I think confidence has been showing just in index performance in the UK market, so people are looking as much at new vehicles to capitalise on as existing ones," Chief Executive Phillip Wale told Reuters, adding that the mood was completely widespread across sectors.

Subdued listing activity due to the global financial crisis had hit small brokers hard in recent years, but more companies are expected to tap the public markets in the coming months as rising stock markets whet investor appetite.

Twenty-two British companies had listed as of September 19, raising a total of $3.9 billion in proceeds - more than double the figure last year, according to Thomson Reuters data.

"I spoke to a fund manager on Friday last week, who is currently looking at 20 IPOs ... that's a significant change on where markets were two years ago," Wale said.

British companies that have already floated shares in the second half of 2013 - or plan to do so - include Foxtons (FOXT.L), Riverstone Energy Limited, Merlin Entertainments (IPO-MEG.L), Tungsten Corporation Plc and Royal Mail (IPO-RMG.L).

Boutique investment bank Shore Capital (LSE:SGR) last week reported first-half profit that more than doubled, as a pickup in the British economy and government schemes drove a revival of domestic small cap companies.

COSTS HURT FIRST-HALF PROFIT

Panmure Gordon's pretax profit from continuing operations plummeted 84 percent to 335,000 pounds ($537,100) in the six months ended June, hit by administrative costs associated with a reorganisation programme it undertook last year.

Panmure, whose offices are located in England, Switzerland and Singapore, said net commission and fee income rose 16 percent to 13 million pounds, but could not offset a near 40 percent rise in administrative costs.

The bank said it expected pre-bonus operating costs to be lower in the second half of the year. "Our expectation is that our costs are slightly weighted towards the first half of the year - we expect those to come down in the second half," Chief Financial Officer Philip Tansey said.

Shares in Panmure, which in 2005 listed on the AIM exchange through a reverse takeover of Durlacher Corporation, were trading down 1 percent to 137.9 pence at 0902 GMT on the London Stock Exchange.

($1 = 0.6237 British pounds)

(Reporting by Richa Naidu in Bangalore; Editing by Supriya Kurane)

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