Euroz Hartleys upbeat despite profit dip

Listed stockbroker Euroz Hartleys still sees a strong investor appetite for equity raisings and floats despite a drop in deals sending its first-half profit lower.

The group has flagged a 9 per cent fall in net earnings to $22.9 million for the six months to December 31, saying deal-making was “good but somewhat quieter compared to the prior bumper year”.

Euroz Hartleys booked reduced fees from its equity capital markets business as the total value of deals handled by the group fell to $743m from $918m for the same half-year in 2020.

As a comparison, Euroz — which merged with rival Hartleys nearly two years ago — did $277m on its own in the December half in 2018.

“We still had a really good half,” executive chairman Andrew McKenzie said.

“We still had a busy period, still a lot of transactions, just not as much as the previous period,” he said.

“But anyone who complains that broking is tough at the moment wouldn’t get much sympathy,” he said.

Mr McKenzie said the initial public offer market had come off after a number of big floats late in 2021 soaked up east coast cash and softened sentiment.

“But the retail market is still pretty strong, there’s lot of cash around to buy dips and quality,” he said.

“Some of the froth and bubble has definitely come out of the market, but we have still got a decent IPO pipeline and a solid pipeline of secondary raisings as well.’

Euroz Hartleys’ performance is closely linked to the commodity price cycle and investor appetite for the WA mid-tier companies in its orbit, as well as the value of local stocks held by its two listed investment companies, OzGrowth and Westoz Investment.

Both companies are being absorbed by fund manager Geoff Wilson’s WAM Capital under agreed takeovers announced in December.

Euroz Hartleys will pay a fully franked final dividend of 2.5¢ a share on February 25.

Its shares were off 4.1¢ at $1.62 as at 10.45am, valuing the group at $327m.