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Ambrian Capital slims down

RESULTS: Ambrian Capital has ditched its two loss-making arms – but given current financial market volatility, and with the dividend gone, don't expect much from the shares
June 11, 2012

Investment bank, Ambrian Capital, has sold both its loss-making futures broking business, Ambrian Commodities, and its corporate finance and equities arm, Ambrian Partners. That has left the group focused on its profitable metals and biofuels commodity trading unit. But exceptional costs from that restructuring effort have meant a hefty loss and the dividend has been axed – leaving few near-term catalysts for a rerating.

IC TIP: Hold at 8.5p

What's more, market volatility meant a £1.41m loss on the group's investment portfolio and the company reduced its exposure to junior resources stock – so the investment portfolio fell from £4.22m to £1.73m. Further losses of £1.31m were sustained on the fossil fuels side although, since the year-end, the group has ceased activities in Ambrian Energy and Strategic Energy Bank. In the two remaining trading arms, Ambrian Metals was faced with periods of extreme volatility and did well to record a pre-tax profit of £1.65m against £1.8m a year earlier. And the biofuels trading arm, established in September 2010, managed to reverse a small loss in the previous year to generate a profit of £0.96m as turnover jumped 64 per cent to £2.2m.

AMBRIAN CAPITAL (AMBR)
ORD PRICE:8.5pMARKET VALUE:£9.5m
TOUCH:8.5-9p12-MONTH HIGH:25.5pLOW: 7.75p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:18pNET CASH:£15.4m*

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200710.65.794.31.75
2008**9.60-17.6-12.91.50
200917.52.932.81.50
2010**5.501.441.621.50
20116.89-2.66-9.88nil
% change+25---

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Payment:-

*Excludes clients' deposits

**Restated