Panmure Gordon, a British investment bank controlled by Atlas (NYSE:ATCO) Merchant Capital and QInvest, reported a substantial loss for 2022, contrasting with its profitable performance in the previous year. According to Companies House filings, the bank posted a loss of £16.3 million ($19.8 million) in 2022, a significant downturn from the £3.1 million profit recorded in 2021.
The bank's poor performance is largely attributed to a wider slump in dealmaking which led to a 43% drop in revenue to £27.6 million. In response to this challenging environment, Panmure Gordon has sought to bolster its financial position by raising capital through share issuances. The company raised £3 million through new shares issued to its parent company and an additional £5 million earlier this year.
Despite the difficult market conditions, Panmure Gordon continues to explore strategic opportunities. Amidst a deals drought in London, the bank abandoned its planned merger with FinnCap Group Plc but remains open to other potential partnerships or alliances.
InvestingPro data reveals that the bank's market capitalization stands at $1641.98M, with a P/E ratio of 13.39, indicating that investors are willing to pay a high price for each dollar of earnings. The bank's revenue growth has been sluggish, with a quarterly increase of 5.79% in FY2023.Q2. Its gross profit margin stands at 51.99%, which is quite impressive and aligns with one of the InvestingPro Tips, suggesting that the bank maintains high gross profit margins.
The leadership of Panmure Gordon has also seen changes in recent years. American-born Bob Diamond, who controls the bank through Atlas Merchant Capital and QInvest, appointed Rich Ricci to lead the firm in 2020. Diamond himself had previously resigned as CEO of Barclays (LON:BARC) following a Libor rigging scandal.
Looking ahead, Panmure Gordon plans further capital injections later this year as it seeks to navigate the challenging market conditions and return to profitability. According to InvestingPro, the bank's return on assets is 13.12%, which is significant and suggests that the company operates with a high return on assets, another InvestingPro Tip. Moreover, the bank also pays a significant dividend yield of 7.61%, a key factor for investors looking for income in addition to capital appreciation.
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