Clarkson Hill in warning as it looks to raise capital
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National IFA Clarkson Hill is in talks to raise cash and warns that the firm may not be able to continue if it cannot bring in fresh capital.
The Cambridgeshire-based company, which has around 110 member firms, ran up exceptional costs of £230,787 due to a regulatory review of its systems and controls last year. It revealed the FSA probe into its systems and controls as it posted pre-tax losses of £636,699 for 2009.
Independent consultants were employed to review the company’s processes and make the necessary compliance changes. The firm says its procedures are now in line with FSA requirements.
Late filing of Clarkson Hill’s accounts led to the temporary suspension of its shares on Aim but it has now been able to resume trading.
The company’s results for the year to December 31 show a pre-tax loss of £636,699. This is down slightly from the £669,207 losses reported for the prior 17 months.
Clarkson Hill has also been billed £105,000 toward the £80m Financial Services Compensation Scheme levy to pay for the collapse of Pacific Continental Securities UK, Square Mile Securities and Keydata Investment Services.
The £105,000, representing 75 per cent of Clarkson Hill’s total FSCS bill, has been backdated to 2009 and identified as an exceptional item as it is now subject to a judicial review.
Redundancy costs and the renegotiation of office contracts pushed Clarkson Hill’s total exceptional costs to £465,107.
The company revealed it needs to raise further capital, given the 2009 losses and higher regulatory costs.
The accounts say: “The directors recognise that in order to meet regulatory requirements, an injection of capital is required. Currently, the directors are in discussions with a number of parties and are confident this objective will be achieved, however if it is not forthcoming the company may not continue as a going concern.
“There is a reasonable expectation that the group will have adequate resources to continue in operational existence for the foreseeable future.”
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