Transaction slump hits Quayle Munro forecasts

SHARES in Scottish merchant bank Quayle Munro slumped dramatically after warning it will fall into the red this year due to a slowdown in corporate transactions.

In an interim management statement, the Edinburgh and London-based advisory firm said that the number of transactions completing, and the associated revenues to be invoiced, would be “significantly lower” in the second half of its year than in the first and that this will result in a full-year pre-tax loss.

The statement added that the group was “encouraged” by its pipeline of new and existing business and the “possibility” of completing major transactions in the second half of 2012, the first half if its new fiscal year.

In April, the firm’s managing director Rob Cormie told The Scotsman that “this year is unlikely to be as successful as last year”.

He said: “The task for all of us in this market is how we make a proof of return for our shareholders. That is the challenge. It is fair to say that this year is unlikely to be as successful as last year.

“We do deals, and if there are fewer deals you get a lot less money. It doesn’t make us bad people.

“Things have been pulled, they didn’t happen or they were delayed. I don’t think I have seen a transaction come in ahead of schedule.”

Last year, Quayle Munro scraped a £162,000 pre-tax profit on £14.7m of revenues, although it made an operating loss of £309,000. This was down from 2010 when the firm made profits of £10.9m on revenues of £15.7m.

Shares in Quayle Munro fell 87.5p, or 15.2 per cent, to 487.5p.