May 7, 2010 / 10:40 AM / in 8 years

UPDATE 2-GMP Capital posts loss on impairment charges

* Q1 loss C$0.89/shr vs EPS C$0.12 yr ago

* Revenue up 23 pct at C$82.6 million

* Shares down 1.9 pct in Toronto (Recasts, adds dateline)

TORONTO, May 7 (Reuters) - Investment dealer GMP Capital Inc (GMP.TO) reported a quarterly loss on Friday despite soaring revenue as it was hit by non-cash impairment charges.

The Toronto-based company, which tripled its private client operations last year in a merger with Richardson Partners Financial, said it had a first-quarter loss of C$62.4 million, or 89 Canadian cents a basic share.

That compared with net income of C$7.1 million, or 12 Canadian cents per basic unit, a year earlier.

The loss came mostly as the value of its EdgeStone business slumped, hit by a poor fund-raising environment.

The firm said it took an impairment charge of C$65.4 million on goodwill and a C$15.0 million charge on intangible assets.

GMP said revenue jumped 23 percent in the quarter to C$82.6 million, buoyed by higher income from its investment banking arm.

“Our investment banking franchise benefited from improved activity in the Canadian mid-market, particularly in the resource and industrials sectors,” Chief Executive Kevin Sullivan said in a statement.

By merging its wealth management division with Richardson Partners last July, GMP gained significant investment scale, and lifted its small and struggling private client segment into Toronto’s major leagues.

In March, the company helped lead Athabasca Oil Sands Corp (ATH.TO) to the largest Canadian initial public offering in a decade, and the largest North American IPO in the year to date.

“We are very pleased with the performance of our capital markets businesses this quarter, with investment banking revenue up 69 percent compared with the same period a year ago,” Sullivan said.

Excluding impairment charges, adjusted net income was C$13.6 million, with adjusted earnings per share of $0.19, GMP said.

GMP shares fell 1.94 percent, or 23 Canadian cents, to C$11.60 on the Toronto Stocj Exchange Friday morning. (Reporting by Koustav Samanta in Bangalore and Pav Jordan in Toronto; editing by Rob Wilson)

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