U.K. investment bank Durlacher expects to report substantial losses for the six months to December 31. Shares in the company fell by 19 per cent to 23.5 pence upon the announcement.
'Recent turbulence in the technology, media and telecoms sectors has negatively impacted on Durlacher's stockbroking, corporate finance and investment businesses which are principally concentratedd in these areas', the company said in a statement.' This has been most evident over the last four to six weeks and is anticipated to result in a small trading loss for the period.'
The statement delivered a more positive message also. It went on to say: “In accordance with the British Venture Capital Association guidelines, the group would have shown, in respect of those investments where there has been a positive valuation event, an uplift of in excess of £25m in this six month period alone. In addition, unrealised gains on the Group’s quoted investments currently amount to approximately £6m. However, the group’s prudent accounting policies do not allow any uplifts in the valuation of investments to be shown in reported numbers.”
The company also expects to write-off £13 million on its investments in first-half due to the volatility of the markets. Durlacher has not named which investments it has written off but many analysts predict that it will centre around its dot com investments. It's portfolio includes the451.com, Zeus Technology, 365 Corporation, Confetti, bizzbuild and Sharecast. Durlacher held a stake in the The Net Imperative Ltd, before it went into liquidation in May of this year. Netimperative.com is now operated by Heltward Ltd.
Durlacher also said that it will change the way it reports to shareholders on investments, providing portfolio reviews in preliminary statements.
“We believe the action taken today provides clarity for shareholders on our investments and trading from a prudent and cautious accounting standpoint,” said chairman and chief executive Geoffrey Chamberlain. “We remain committed to using our knowledge-led investment approach to identify and realise value in our selected areas of activity.”