Merrion Stockbrokers suffers 50pc plunge in revenue
THE stockbroking arm of Dublin finance house Merrion suffered a 50pc collapse in revenue last year amid tumultuous market conditions and a brutal Irish economy.
The dramatic fall-off is revealed in accounts just filed for Merrion Stockbrokers, charting the last full year before Merrion's restructuring.
A deal devised over the summer and completed saw Merrion redistribute its capital among three divisions -- stockbroking, corporate finances and funds management divisions.
The deal ultimately saw funds flow from stockbroking to other ends of the business, while a number of senior executives, including equities boss Enrique Curran, departed.
The developments led to speculation that Merrion was preparing to slim down its stockbroking operations by shutting its equities desk and research divisions, though Merrion has repeatedly denied this.
The latest accounts show how much business has fallen back in Merrion Stockbroking, as 2009's income of €16.6m trailed the €33.5m enjoyed in 2008.
The 2009 year also saw the introduction of a €700,000 charge for legal claims that may arise in the future, reflecting the level of suits being brought against stockbrokers.
Merrion responded to the harsh environment with severe cost reductions, including a halving of director salaries that helped deliver a €12.6m cutback in overall administrative expenses.
Bosses succeeded in keeping the firm in the black, but pre-tax profits fell from €7.9m to €3.6m. In their annual statement, the directors said they were "satisfied" with the performance.
When the Merrion deal went through over the summer, reports suggested that profits had fallen from €8m in 2008 to €6m last year.
Those figures are understood to relate to a group holding company which made €6.1m last year.
"This was a good performance after the collapse of Lehman Brothers in September 2008 and the economic turmoil that ensued in Ireland and abroad," Merrion said last night in a statement.
The 2009 accounts show Merrion Stockbrokers' head count fell from 90 to 75 over the year. Merrion now employs 62 people across the group, including some new staff that joined after the restructuring.
The 2009 filings also show dividends of €25m were paid by Merrion Stockbrokers that year; those dividends were inter-company payments, with none of the cash going to end-of-line shareholders.