Wealth manager and Financial Planner WH Ireland has issued a profit warning as the group continues to be hit by market volatility.

The company said in a trading update today that it expects to make a pre-tax, full year loss of over £2.2m when annual results are released.

For the 12 months of trading ending 31 March, following the end of its financial year, the group said that it, “continued to be impacted by market conditions throughout the second half of its financial year.”

It added that, “accordingly trading is now below previous management expectations.”

Revenue for the full year is expected to be about £26m and the company anticipates reporting a loss in excess of £2.2m.

WH Ireland said the decline was mainly due to the “widely reported” lack of transactional activity in capital markets during 2022. It said this had continued into 2023 and hit the Capital Markets Division.

To respond to this the group has cut costs and says the division has the potential to exploit any upturn in the market when it occurs. The Capital Markets Division closed the year-end with 88 retained corporate clients, the same as the previous year.    

In contrast, the firm’s Wealth Management Division remained “resilient” and achieved underlying profitability in the last six months, the firm said. Assets under Management in the wealth division fell modestly to £1.5bn (31 March 2022: £1.6bn). Group Assets under Management were £2.2bn (31 March 2022: £2.4bn).

The company had cash at the period end of £4m (31 March 2022: £6.4m) ahead of the receipt of quarterly recurring cash from the company's platform providers (anticipated to be at least £2.5m), due imminently the firm said.

In December the firm reported a pre-tax loss of £380,000 compared to a profit of £300,000 in the same period the previous year in half year figures. Revenue for the six months ending 30 September dropped by 15.9% (£2.7m) from £17m to £14.3m. Revenue in the wealth management division was down by £500,000 to £7.3m (H12021: £7.8m).

As revenue fell, the company made £2.2m of cuts to admin expenses and reduced headcount from 163 to 156.

WH Ireland’s share price has fallen from 45p a year ago to 18.9p in early trading today.