Evolution's pre-tax profits hit £21m in bumper year

EVOLUTION Group – the stockbroking firm that launched its Edinburgh private client business after poaching staff from Barclays Wealth – yesterday unveiled a bumper 2009, fuelled by opportunistic hiring at the peak of the credit crunch.

Pre-tax profits soared to 21 million, from an adjusted figure of 1.9m a year earlier, while on an operating level the company returned to the black – clocking up profits of 20.8m from losses of 2.7m a year ago.

Income soared 103 per cent to a record 129.4m, helped by a 25 per cent increase in headcount to more than 450. Evolution, formed in 1999, was one of the few independent investment banks to expand during the downturn. It hired aggressively last year, taking on staff from former Dresdner Kleinwort's securities business.

In 2008, its Williams de Bro arm lured a 27-strong investment management team away from Gerrard Investment Management, part of Barclays Wealth, to launch its Edinburgh private client business. Williams de Bro closed its institutional fund sales office in Edinburgh in 2006 following Evolution's acquisition of the firm.

Keith Baird, an analyst at Oriel Securities, said: "The revenues are stronger than I was going for and so are the profits. The worries concerning this year are around levels of market activity, firstly, and, secondly, staff retention."

Evolution said its new partnership incentive scheme – under which staff pay up front for options set at a premium to the current share price – would help it hold on to staff.

Its shares were flat at 120p.