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Lighthouse reports £2.66m loss due to restructure and past business review

Lighthouse Group made a pre-tax loss of £2.66m for 2011, compared to a £129,000 profit the previous year, due to £3.37m costs associated with a past business review of the Falcon and FSAS brands.

Earnings before interest, tax, depreciation and amortisation and non-recurring operating expenses were up 21 per cent, from £1.4m to £1.6m, while revenues dropped from £63.1m to £60.4m.

The group’s restructure saw the Falcon and FSAS brands wound down and advisers transferred to the Lighthouse Advisory Services network. Lighthouse says a few firms will still use the Falcon brand for trading.

Lighthouse  says: “Subsequent to these rationalisations, and as also announced in the 2011 Interim Results released in September, certain aspects of Falcon’s historical trading became the subject of review and, as a consequence, the Board deemed it prudent to recognise an aggregate non-recurring charge of £2.93m at that stage. Following the closure of FSAS and other related matters, the charge has been increased by £0.44m to £3.37m.”

The group’s results show cash reserves of £11m, compared to £11.2m in 2010.

Lighthouse increased dividends for 2011 to 27p, up from 24p, but warned the introduction of the retail distribution review could hit future dividends in the short-term. The results also warn of “considerable industry dislocation” in early 2013 and beyond.

Lighthouse executive chairman David Hickey says: “As the industry approaches the introduction of the RDR, it is increasingly evident that operational scale and financial strength are becoming key differentiators in the industry.”



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There are 6 comments at the moment, we would love to hear your opinion too.

  1. I wonder what the “certain aspects of Falcon’s historical trading” are that have cost them £3.37m to resolve?

    And indeed is this the end of the story….?

  2. One has to start wondering are networks going the way of direct salesforces?

    Does the business model work? Two or three people at the top dictating what business can be done and how it should be done and then finding out down the road it was wrong. Seems very familiar.

  3. To Annon @10.16am. I hope its the end. I am a lighthouse member and have no idea what these “certain aspects” are either

  4. Thats one hell of a cost for “certain aspects” Did the Board get conned by buying a pig in a poke. i would like to know as I am a member of Lighthouse.

  5. That darned High Court appeal getting in the way?

    Networks are doomed.

  6. Philip Westwood 13th March 2012 at 2:34 pm

    To Exasperated Me @ 12.42pm

    Forgive my ignorance but what High Court appeal is that – any light you could shed or point us all in a useful direction would be much appreciated…….

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