GMP closes UK business because of crashing commodities prices
|
Version 0 of 1. Canada’s GMP Securities is shutting its UK business as the natural resources focused stockbroker struggles to cope with the oil and mining downturns. The closure of the firm’s London office will lead to the loss of 30 jobs and forms part of an overhaul of its struggling capital markets division. Toronto-based GMP, which is also pulling out of Australia, is broker to a number of small oil and mining exploration outfits on AIM. Stockbrokers have been under pressure to cut costs ever since the financial crisis which restricted the number of takeovers and stock market floats – where they make the bulk of their money. Shares in Panmure Gordon crashed last month after it said a lack of deal-making will cause it to swing to an annual loss. A spokesperson for GMP told the Independent: “These are the right moves as we ride out the current slowdown in capital markets, deal with fundamental changes to the underlying brokerage business, and position the firm to compete aggressively and successfully in every stage of the cycle.” GMP confirmed that it would take a C$15 million hit from the restructuring but said the changes will save it at least C$40 million a year. The stockbroking arm made a third-quarter pre-tax loss of C$2.8 million on revenues of C$51.8 million. By contrast, GMP’s wealth management division made underlying earnings of C$7.7 million on revenues of C$64.9 million. Parent company GMP Capital said the restructuring will sharpen its focus on North America, where it generated 93% of its reported revenues in 2015. The company, listed in Toronto, said it would suspend its dividend to bolster its balance sheet. |