Westhouse sees signs of an IPO revival

The stockbroker, which has an office in Leeds, said it is encouraged by the outlook as more opportunities to advise on mergers and acquisitions also arise.

The company, which was known as Hanson Westhouse until its reverse takeover of Sovgem last year, yesterday reported its first year's results as a listed company. Westhouse said once the acquisition gains were included, pre-tax profits for the year to the end of December were 1.2m, compared with a 709,000 loss a year earlier.

Turnover improved by 6.7 per cent to 4.78m, with

revenues "significantly" increasing in the second half of the year to double takeover in the first half.

"The improvement in sentiment we saw developing in the second half of last year has continued," said chief executive William Staple. "We are beginning to see renewed interest in the IPO market with a number of potential transactions in prospect. We are also seeing more merger and acquisition advisory opportunities.

"Although it is still early to predict performance for the rest of this year, the outlook is encouraging, particularly taking into account the initiatives the board has taken to strengthen and diversify the business."

Westhouse said net assets have increased to 6.85m from 1.98m a year ago and include 1.75m in cash.

Increased activity included its AIM-listed clients raising money through share placings, with Nighthawk Energy raising 22m in July and PureCircle raising 40m in November.

The company is nominated adviser and broker to Leeds-based surgical instruments firm Surgical Innovations.

Mr Staple said the IPO revival on AIM is taking longer than expected to arrive.

"If you had talked to me three or four months ago, I would have said we would be seeing a real revival of the IPO market in the first few months of the year," said Mr Staple. "That has not happened. Confidence is returning gradually but it is has not returned as quickly as one might have hoped.

"But now we are seeing a measure of interest in IPOs and as we go into the year we are going to see more."

The company hopes to work on several IPOs in coming months, featuring the resource and high-tech sectors, as well as companies with exposure to China.

Westhouse is now planning the imminent launch of a market making desk, after bringing in trading expert Simon Doyle to establish the

operation. Mr Doyle, who has more than 30 years' experience, established market making desks at Altium Capital in 1998 and Seymour Pierce in 2005.

Initially Westhouse plans to make markets in stocks of its corporate clients as well as other companies it covers through research, before broadening its spread. The company expects the Financial Services Authority to approve its principal trading licence shortly.