BJM may quit JSE if shares remain in doldrums
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Chief Reporter
SA`s largest independent stockbroker, Barnard Jacobs Mellet (BJM), will consider delisting from the JSE Securities Exchange SA if the performance of its share price does not improve.
The shares tumbled 4,8% yesterday after the company said it sustained a loss of R4,8m for the six months to September, a performance which co-CEO Kevin Jacobs conceded was `not great` considering the improvement in markets.
The share was trading at about 220c yesterday, and has traded far below its net asset value of 307c for some time now. Jacobs said the possibility of a delisting would come up for discussion by the board in the next six months.
The results for the six months showed that although BJM posted losses, it made progress in its most troublesome operations.
The main South African broking business saw profits rise 38% as local markets showed a 22% increase in trading volume.
Also, its private client business, which caters to high net worth individuals, finally pulled itself into the black after losing money last year.
That business now manages assets in excess of R10 bn.
But BJM saw its income from its fixed-interest operation slide 51%. `Bonds activity fell like a stone because of the absence of new (bond) placings from either government or the parastatals ,` said Jacobs.
Also, its UK business continued to post losses, forcing BJM to close its branch in Scotland and move those employees to its offices in London.
These factors meant revenue was only marginally lower than previously, at R106m from R108m in the previous period.
But the difference between the slim R735000 profit for that period and the R4,8m loss this time comes down to two abnormal factors:
BJM was forced to write down its preference share investment, which underlines its empowerment deal, by R2,6m, due to accounting rule AC133.
It also took a R4m hit due to the onerous conditions attached to a fixed-rate loan it negotiated a few years ago. Under this loan from Mettle Finance, BJM agreed to pay 15,36% interest, which hit its profit when the first part of the loan was due for repayment in October.
However, Jacobs said the good news was that the second half of this loan
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