Braemar hit hard by Armchair’s losses

Rachael Tinniswood

Hale-based investment fund manager, Braemar group, has reported a loss of £450,000 in the year ending March 2008, a decline which has more than doubled since the previous year.

Commenting on the loss, which rose sharply from £186,000 in 2007, chairman Martin Robinson said that it "reflects the continued expenditure on staff and systems during the year as we built the group to handle an increase in business activity, which only materialised in the fourth quarter".

The company said the decline had stemmed from a number of areas, most notably the credit crunch, which heavily affected the £471,000 yearly trading losses of the firm's property sourcing business, The Armchair Property Investor. Armchair's activities have now been discontinued.

Only last year Braemar paid £2.2m for Altrincham-based Armchair, which boasted a database of more than 10,000 residential property investors.

In a statement to the stock exchange, Robinson said: "The 'credit crunch' made it increasingly difficult for private investors to fund the purchase of buy-to-let property, the mainstay of Armchair's business, resulting in the cancellation of transactions that had been previously committed and a significant fall in the level of new enquiries."

Another factor cited as having an impact on the group's overall revenue was the postponement of the launch of the firm's shared ownership open ended investment company and its substitution with two agricultural land investment vehicles. This move, said Braemar, meant that the Group carried a higher level of overhead during the year in preparation for product launches which did not materialise and therefore did not generate revenue.

Overall, group revenue for the 12 months up to March 2008 was £1,264,000, down from £2,365,000 in 2007. This was made up of £776,000 from Braemar Securities', an increase from £390,000 in 2007; £475,000 from Braemar Estates – a £25,000 increase on last year's figure; and £13,000 from property investment and trading.

Braemar's 2007 revenue figure also included £1,525,000 from the one-off sale of two properties.

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