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Prestbury buys mortgage and GI network Blue Pearl

Prestbury Holdings has bought mortgage and general insurance network Blue Pearl despite making a loss of 2.7m.

The deal doubles the total number of advisers working for Prestbury to 105 appointed representative firms authorising 210 registered individuals.

But the firm has revealed a loss of 2.7m for the financial year to October 2004.

The consideration for the purchase of Blue Pearl is three million new ordinary shares of 5p each in Prestbury to be issued in tranches related to performance over the next 12 months plus 300,000 in cash, of which half is deferred for six months. This will be funded out of cashflows.

In keeping with the low-risk Prestbury model, Blue Pearl has not been exposed to the sales of endowments, precipice bonds or any other high-risk investment products. The company is free of debt and Prestbury says it has received no complaints or claims for misselling.

Prestbury currently has four main revenue streams – life insurance, conventional mortgages, monthly management fees and as a packager of high-margin non-conforming mortgages.

The company’s turnover rose by 13 per cent last year from 4.6m to 5.2m but losses increased from 1.8m to 2.7m.

Chief executive Lee Birkett says: “When we bro-ught Prestbury to Aim 30 months ago, we said that we planned to create a leading force in the new regulated world that was emerging. Since then, we have invested heavily to create the trading and compliance infrastructure needed for success in this new world.”

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