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Signia Wealth pares losses as restructure gathers pace

Signia Wealth pares losses as restructure gathers pace

Signia Wealth pared back its losses by two thirds last year as the new management team’s restructure of the business and cost-cutting measures started to bear fruit.

The firm’s operating loss fell from £3 million in 2014 to £1 million last year, while turnover remained flat at £4.7 million. Signia’s total operating expenses were reduced from £7.9 million to £5.2 million year-on-year, although these savings were partially offset by £546,000 in legal costs related to the company’s ongoing dispute with former co-founder and chief executive Nathalie Dauriac-Stoebe.

The company’s 2015 full-year results, filed at Companies House this month, provide a snapshot of the progress made by the firm’s new executive team.

Managing director Carnegie Smyth (pictured), head of wealth management Greg Malone and chief investment officer Etienne de Merlis rejoined Signia in March 2015, following Dauriac-Stoebe’s acrimonious departure two months earlier.

Smyth immediately set about slashing costs with six staff members made redundant on the management team’s first day back. Further cuts have been made across the boar. The firm cancelled the lease on an unused additional floor in its London office, closed its Birmingham branch and made broader savings across the professional services it uses, plus on travel and entertainment.

The stability of Signia’s revenue through the period of change suggests assets under management (AUM), which are not disclosed, have remained broadly constant.

‘We’ve managed to retain the vast majority of revenue and only a handful of clients have departed since the change,’ Smyth said. ‘We accept that and those losses have been more than compensated for by new clients coming in, and we have an ongoing ambition to grow the business.’

The vast bulk of new client wins have come from the firm’s professional connections, but its hedge fund proposition, headed by Michael Rosenthal, the fourth member of the executive team, has also proved a draw.

‘The hedge fund has performed very well and we have attracted a couple of prominent families as clients in that area. Michael’s providing something different and the fund’s performance and low volatility is attractive to clients,’ Smyth said.  

Earlier this year, Signia raised additional shareholder capital of £5 million in June to shore up its balance sheet, according to a Companies House filing. Although the ongoing legal dispute with Dauriac-Stoebe, who is claiming wrongful dismissal, is set to add further cost, which will be detailed in the firm’s 2016 results, the case is expected to conclude next year.

Smyth is looking forward and with the business on a significantly surer footing, acquisitions to boost growth could be on the cards down the line.

‘There’s nothing imminent planned, but we are always on the lookout- there are a lot of opportunities in the market,’ he said.

‘A number of players have recognised that critical size of AUM needed in our business is getting higher and we are always looking to see if there are deals to be done.’

 

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