Arden is today issuing a trading update in respect of the six-month period ended 30 April 2020.
Arden made a good start to the six-month trading period despite it encompassing the elevated political uncertainty around Brexit and then the General Election. Trading towards the end of the period has been impacted by the significant global market declines in reaction to the COVID-19 pandemic.
Compared to the performance in the six months ended 30 April 2019, we anticipate materially higher corporate finance revenues, higher retainer levels but lower equity commissions. The equity trading operation suffered material losses as markets fell in response to COVID-19.
The Board has implemented steps to reduce the Company's cost base. As a result, the Company's current annual cost base is anticipated to be more than 25% lower than last year. The measures taken include salary and fee sacrifices for all Board members and certain senior employees of in excess of 40% of salary; salary sacrifices for all other employees; the furloughing of a number of staff and the cancellation or deferral of all discretionary expenditure. Arden will also defer the payment of VAT in line with the government's proposals. The Board will continue to take action to reduce costs and minimise the financial impact of the uncertainty caused by COVID 19.
Before taking into account the equity trading book losses, Arden expects to report a profit for the six-month period. After taking into account the equity trading book losses, Arden expects to report a reduced loss for the period compared to the prior year.
The Company has a strong balance sheet, with cash and cash equivalent resources well in excess of its regulatory requirements.
Operationally, we responded to COVID-19 promptly and successfully implemented a comprehensive remote working capability, which has enabled us to ensure both the wellbeing of our staff and the ability to continue servicing our clients as normal. The Company is fully operational and continues to operate as normal. Due to the quality and flexibility of our people and the strengths of our business, our ability to attract and win new high-quality corporate clients remains strong. We continue to sign up quality clients and have a good pipeline going forward.
We are working closely with our corporate clients to assess the disruption caused by COVID-19 and, where possible, assist them in protecting their businesses and continuing to implement their strategies. Our aim is to fully support all corporate and institutional clients during these unprecedented times.
Mark Ansell, Chairman, commented:
"The COVID-19 crisis has presented unprecedented challenges to our business. However, it remains in a strong financial position and we have taken the necessary actions to enable us to confront the current market environment without harming our ability to fully service our clients. The Board is indebted to the Company's employees for their hard work and ongoing support in light of these challenges.
The Board's priorities remain to protect the Company's balance sheet and to deliver on our stated growth strategy."