Cavanagh Group's operating loss increased from £70,000 to more than £1m in the six months to April 30 as the firm started to integrate acquisition Ernst & Young Financial Management.
Cavanagh reported losses of £1.08m, around half of which it blames on the non-recurring costs of the £3m move for EYFM.
However, turnover more than doubled from £2.4m in the same period last year to £4.9m, which group chairman John Campbell says marks the start of Cavanagh's “year of change”.
Cavanagh says now that the firm has identified areas of duplication between the two businesses, it expects to save about £1.5m annually. Levels of income have already increased on the same period in 2003, with adviser numbers up from 37 to 70.
Cavanagh admits there were redundancies after the EYFM deal, with overall staff numbers across the combined businesses down from 206 to 192. It has also closed its Guildford office and relocated its operations to London and Cuckfield, leaving the group with 10 premises in England and Scotland.
Despite the losses, Campbell says both businesses have “recovered” their former strengths, with turnover averaging £1.1m a month over the three months to May. He says with the geographical coverage offered by its offices, the group will be able to serve clients more thoroughly and with a broader offering.
He says: “From this robust base, we will continue to seek new business opportunities, provided they can be shown to add value for the benefit of our stakeholders.”