Inter-Alliance's losses soared to £33.5m last year despite increasing revenues and slashing costs.
The loss for Inter-Alliance, which is in merger talks with Millfield Group, is almost double its £17.7m loss in 2002.
IA increased its gross revenue by 22.5 per cent from £51.9m to £63.6m.
The group slashed costs after nearly halving staff numbers from 595 to 298 and cutting the number of operating premises from 59 to 39 last year and now down further to 26 premises.
Inter-Alliance, which issued its results at the London Stock Exchange deadline last week, blames the higher than expected loss on the substantial costs of the restructuring programme which was completed during the first quarter of this year.
It says the programme, which started in January 2002, has caused operating overheads to rise as the group now pays admin costs it did not previously incur.
Chairman and chief executive Keith Carby says a successful conclusion to the merger talks with Millfield will”augment” IA's position but analysts believe it could have possible problems if the talks fall through.
Carby says: “Written commitments to make available the necessary funds for the merger have been obtained and the directors are now awaiting the FSA's decision.”
Durlacher analyst David Pannell says: “Inter-Alliance's weak balance sheet means that it really needs to complete the merger as soon as possible.”