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Stonehage Fleming merger costs increase losses

Stonehage Fleming merger costs increase losses

Stonehage Fleming posted a £1 million loss in its last financial year due to a combination of costs relating to the company’s merger and historic one-off charges.

In its first full year results covering only the UK business, since Fleming Family & Partners and Stonehage merged to create Stonehage Fleming, the company said it had incurred £200,000 of costs in addition to the previous year’s £4.3 million as a result of the integration.  

This resulted in its losses widening from £300,000 in 2015 to £1 million in the 12 months to the end of March 2016, although the group increased turnover by 9% to £29.6 million. The UK operations, including the Channel Islands, were the major contributor to turnover with £26.7 million, while Europe added only £31,000, which is a 99% decrease compared to 2015. 

The company’s assets under management and administration also increased during the period to £5.3 billion from £4.1 billion. No dividend was declared or paid during the year.

The results were filed after the acquisition of FF&P Wealth Planning by Stonehage Fleming, which was announced in October. As a result, the company rebranded as Stonehage Fleming Wealth Planning and become a wholly owned subsidiary of the group. At the time the group refused to disclose the sum paid for the wealth planning business, however in its results it revealed that the prior 37.88% stake Stonehage Fleming had in FF&P Wealth Planning was valued at £750,000, and this was ‘reclassified as assets held for sale’.

This holding was sold to another wholly owned subsidiary called Sturdon Holdings for £1.4 million. This suggests the business was valued at £3.7 million. The reason for the corporate restructure are unclear.

Meanwhile, the company also restructured its two investment management subsidiaries in the year to March 2016. This included the phased transfer of Stonehage Investment Partners’ business to Stonehage Fleming Investment Management.

The company noted: ‘The underlying result of the group improved in the year ended 31 March 2016. This trend is expected to continue next year as the group benefits from being part of the broader Stonehage Fleming Family & Partners Limited Group.’

An interesting note in the accounts is the valuation of its antique clocks. The company said that it ‘has a number of antique clocks, included within furniture, fixtures, fittings and other, whose fair value of £327,000 exceeds their current valuation under the historical cost model of £300,000.’

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