A listed firm has sold a loss-making business at a fraction of the price paid for it less than a year ago. The board of Ince Group plc announced today it had agreed to sell its subsidiary Arden Partners to financial services group Zeus.

Ince will receive just £1m cash upfront for the business with a potential £2m payable based on Arden revenues over the next three months.

Ince agreed a deal in October 2021 to buy the corporate adviser and stockbroker for £10m, with shareholders voting in January to approve the acquisition. The transfer went ahead earlier this year after High Court approval and despite the stock exchange rejecting Arden’s application for nominated adviser status.

But since the buyout was finalised, there has been an overhaul at Ince, with a new management team installed and a new strategy to re-focus on the legal services business and dispose of assets not aligned with that.

In a statement to the London Stock Exchange today, Ince said the ‘macro-economic headwinds’ experienced by capital markets in London have delayed a substantial part of Arden’s transaction pipeline.

The statement added: ‘In addition, the continuing pressure on revenues and operating margins within the small cap broking sector has increased the requirement for investment and scale in Arden’s business, at a time when Ince is least able to make such a commitment.’

Arden’s most recent audited annual results, for the year to 31 October 2021, show revenues of £9.28m and a profit before tax of £850,000, with net assets of £5.76m.

Revenues for the current financial year have ‘declined significantly’, the Ince statement said.. ‘As a result Arden is currently loss making and the opportunities and benefits that were identified by Ince at the time of the acquisition of Arden are now not expected to be achievable for the group, given its current resources.

‘The disposal allows Ince to concentrate its investment and resources on its core legal services business, where the Ince Board believes there are a number of significant growth opportunities.’

Ince chief executive Donnie Brown said: ‘In challenging market and economic conditions, the disposal of Arden will allow Ince to focus its resources on its core legal business where there are increasing opportunities. It also benefits Arden whose clients and employees will become part of a much larger business that is well positioned in the London equity markets.’

Share in Ince Group plc rose by 6.57% to 7.3p on the announcement, before dropping back to 6.84p.

 

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