Broker WH Ireland is scouting for acquisitions in financial services after lifting first-half pre-tax profits 58 per cent to £3.7 million.

Manchester-based Ireland’s profit for the six months to May was £100,000 more than the company made for the whole year to November and was boosted by an unrealised investment gain of £992,000. Interim operating profits rose 54 per cent to £2 million, mostly reflecting corporate finance deals, on turnover up 35 per cent to £21.5 million, which chiefly represents the AIM-quoted company’s stockbroking activities.

Chief executive and significant shareholder Laurie Beevers said the second half-year is unlikely to show anything like the same rate of pre-tax profits growth, unless a hefty corporate finance deal comes along. He and his colleagues are anxious to increase Ireland’s recurring fee income, as well as continuing to increase the size of its corporate clients, and are looking for an acquisition, to be made at least partly in shares, of a company with strong financial services making £3 million to £5 million annual profits.

This would be a big bite for Ireland, which has a particular interest in the resources sector and already owns Australian broker DJ Carmichael. But the company ended the first half-year with more than £15 million cash and has spent £1.2 million refurbishing two freehold properties in Manchester, which will be revalued in November and could be worth more than £8 million, said directors.

A large institutional trade that was uncompleted on 31 May distorted Ireland’s balance sheet with £214 million of debtors and £223 million of creditors. Funds managed by the company rose 36 per cent to £1.1 billion and its WH Ireland Growth Trust reached more than £60 million.

Beevers argued that today’s global market place should insulate the company from a downturn caused by higher UK interest rates, unless a prolonged bear market sets in. That is seen as unlikey since he expects US interest rates to trend downwards.

Ireland’s first-half earnings rose 76 per cent to 15.49p a share and the interim dividend is up 39 per cent at 2p, with a likely full-year payout of 5.3p. Analysts expect full-year pre-tax profits of £4 million, before investment gains, for earnings of 16.5p to 17p a share.

That would put the shares, up 7.5p at 140p, on an undemanding prospective p/e ratio of 8.2.

W H Ireland	AIM	£14.5m	69.50p	0.00p
Click here for interactive charting
Other company articles:
First-half loss at WH Ireland			18/08/2008
Marland group moves into broker			01/04/2008
WH Ireland on the prowl			30/07/2007
Ireland’s array of growth prospects			08/08/2006
Expansion continues at WH Ireland			01/08/2006