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.”