Arden Partners

Institutional stockbroker Arden Partners (ARDN) has reported a swing to the black, thanks to solid demand for its services.

In May the AIM company reported it was likely to beat market expectations, so the performance for the six months to April is proof that it is well on track. Sales in the period increased 14% to £7.4m, as the bottom line revealed a swing to a pre-tax profit of £1.2 million (2009: £200,000 loss).

During the period Arden raised over £155m for corporate clients, the bulk of which was for Indian companies (a country in which it has a strong franchise). Since the period end Arden has raised a further £54m. Speaking to Growth Company Investor recently reinstalled chief executive, Jonathan Keeling said 'we are pleased with our performance, and have a significant pipeline of potential new business for the second half'.

Arden has 35 corporate clients and a useful annual retainer base of £1m. In addition, the balance sheet is strong with net cash of £6.3m - significantly in excess of its regulatory requirements. Keeling enthuses that the market making arm has done particularly well, indeed it now trades in 50 stocks with £5.2m of invested capital. In what should prove an earnings enhancing move Arden has spent £1.2m buying in its own shares, moreover it may consider a dividend if appropriate.

Arden has trimmed staff numbers to 48, and has shifted its settlement provider to BNP in a bid to save costs. House broker Altium predicts full-year pre-tax profits of £1.2m and EPS of 3.1p, this assumes a break-even position in the second half, which appears cautious. Arden has a solid franchise, with scope to further leverage its contacts in India. At 62.5p, the shares rate as a long-term buy.