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Caerus profits down 76% after Paradigm deal

Profit at the advice firm went from £1.23m in 2011 to £300,000 in 2012.

Pre-tax profit at Caerus Capital Group fell 76 per cent to £300,000 in 2012 following the acquisition of Paradigm Partner’s network arm Paradigm Financial Advisers.

The company made a profit of £1.23m in 2011, which included £600,000 from a previous disposal of assets.

Caerus agreed the deal to acquire Paradigm Financial Advisers in October 2012. It is currently awaiting regulatory approval to complete the transaction.

Last year Caerus also sold its majority stake in Allium Capital, which helped design the funds behind its subsidiary Caerus Portfolio Management.

Total turnover rose 7 per cent from £28.3m in 2011 to £30.4m in 2012.

Administrative expenses went up by 27 per cent from £4.1m to £5.3m, while wage costs shot up from £500,000 to £1.7m.

Average gross revenue per adviser dropped by 3.5 per cent, falling £6,000 to £164,000 for 2012.

Caerus chief executive Keith Carby says: “Despite the marginal reduction [in revenue] from the previous year, which the directors believe to be partly attributable to the ongoing harsh trading environment and the high level of adviser focus on RDR preparation throughout the year, the level of adviser productivity has exceeded company forecasts.”

Investment Quorum chief executive Lee Robertson says: “Many firms have seen profits hit as a result of the RDR and larger companies have probably been hit disproportionately hard by the regulation. That is because they have so many moving parts, all of which need to be correctly aligned and adapted around RDR.”

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