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(Alliance News) - Finance investment firm City of London Group PLC on Tuesday reported a widened loss due to substantially higher costs and despite a slight rise in revenue.
For the six months to the end of September, City of London reported a pretax loss of GBP3.4 million, widened from GBP2.3 million the same period the year before.
The loss was due to a GBP1.3 million cost, compared to GBP764,000 in the prior year, related to subsidiary Recognise Financial Services Ltd applying to the Prudential Regulatory Authority and Financial Conduct Authority to be authorised as a bank in the UK.
Other costs for the period totalled GBP2.7 million, up from GBP2.1 million.
Revenue meanwhile edged upwards to GBP3.2 million from GBP3.1 million the prior year, as a contribution from Acorn to Oaks, and growth in Property & Funding Solutions more than offset a decline in Milton Homes and CAML.
Looking ahead, City of London Group said it is targeting a further capital raise in 2020 of between GBP25 million and GBP50 million, to facilitate the development of Recognise.
In addition, while market conditions remain competitive, the group said it is well placed to develop its existing businesses, as alternative sources of credit finance become more difficult for the small and medium businesses market to access.
"We are delighted that our Recognise subsidiary has achieved a key milestone with the formal submission of its application to be authorised as a bank in November, following a lengthy pre-application exercise which began in the early part of 2018. Following the success of our cash raising exercise in March and April 2019, we have the funds available to complete the build out of the banking infrastructure which is currently underway," said Chief Executive Officer Michael Goldstein.
"Overall, looking forward, we are well placed to deliver on our strategic objectives of serving the UK SME market and increasing the financial strength of the group, so delivering value for our shareholders," Goldstein added.
Shares in City of London Group were untraded on Tuesday, last closing at 135.00 pence.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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