Edward West
13 November 2009
Johannesburg — BARNARD Jacobs Mellet Group (BJM), the financial services and stock broking company, reported what it said was a "pleasing" profit of R10,8m in the six months to September, but the outlook for the second half remains mixed.
CEO Andile Mazwai said domestically, "the tail-end of the domestic recession hasn't stung yet ", which was why the company had adopted a prudent approach to dividend policy, by keeping the dividend cover at the same level as last year. A dividend of 3c per share was declared.
On the other hand, from a foreign investment perspective, SA would continue to benefit from being in a basket, albeit near the bottom , of emerging markets that were able to generate positive returns from a global investment perspective.
With liquidity being pumped into developed markets through fiscal stimulus, global investors were opting for riskier assets in the search for better yields, he said.
A large proportion of BJM's clients were individual investors. Mazwai said a trend he had noticed among individual investors over the past six months was an aversion to long-term products, and greater acceptance of short-term products, such as for six- to 2-month periods.
He said the JSE had bounced since "ridiculously low" levels in March and while the number of transactions on the market had risen, the "conviction is not what it used to be" and the overall value of trades on the JSE in the six months to September 8 had fallen 18%.
Mazwai said while turnover was down, the results were pleasing as it showed BJM was able to respond to the crisis and reign in costs, "without having to resort to the machete".
An 8% reduction in costs helped headline earnings rise 15% to 12,5c per share while basic earnings per share rose 48% to 15,4c. Revenue, including interest received, was down 10%. All the group's operating segments remained profitable.
"Our nonstock broking businesses, including Barnard Jacobs Mellet Corporate Finance and Barnard Jacobs Mellet Private Client Services ... continued to show real positive growth ...."
Private Client Services extended its products with the April acquisition of the share capital of Quadro Executive Estate Planning. The business had been re-branded as Barnard Jacobs Mellet Wealth.
BJM's share price fell 1,3% to R3,70 on low trading volumes yesterday. The share price has risen 32,1% so far this year .
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