SHARES in Edinburgh-based merchant bank Quayle Munro plunged 15.2% to a three-year low after it issued a profit warning on the back of a falling number of transactions.
Quayle Munro has struggled with a lacklustre market and in March posted a £390,000 pre-tax loss for its first half, although it predicted a "satisfactory result" for the year due to a strong pipeline of business.
However, the company told investors yesterday: "The board now expects that the number of transactions completing, and the associated revenues to be invoiced, in the second half of the year ending June 30, 2012, will be significantly lower than in the first half.
"This is likely to result in a pre-tax loss at group level for the full financial year."
It added: "The board continues to be encouraged by the pipeline of new and existing advisory business, with the possibility of major transaction completions in the early months of the new financial year."
The company declined to comment further.
In response, investors sent Quayle Munro's shares down 87.5p or 15.2% to 487.5p.
This is its lowest close since May 2009.
The move cut £3.6 million from the bank's market value, which now stands at £20.3m.
The hostile market environment provides an early challenge for new chief executive Andrew Adams.
In March, he took over executive responsibilities from veteran dealmaker Andrew Tuckey, who is stepping down as chairman of Quayle Munro in November.
The company is seeking an independent non-executive chairman to replace him.
Founded in 1983 as an investment fund bolted on to an advisory business specialising in privatisation finance, it was listed 10 years later.
Quayle Munro shifted its emphasis to London and to the wider advisory market in 2007.
It joined forces with former Barings director Peter Norris in a £7.5m acquisition of his New Boathouse Capital boutique.
It then acquired the Van Tulleken advisory firm which brought in Mr Adams as well as offices in London and New York, although the latter is now closed.
Its biggest shareholder remains founder and former chairman Ian Jones, who has a 15.1% stake.
After he stepped down in early 2010, Quayle Munro divested itself of most of its investment portfolio to focus on advisory work.
Quayle Munro specialises in particular in media, retail, finance and energy deals.
In an interview with The Herald last year, Quayle Munro's senior dealmaker north of the Border, managing director Rob Cormie, outlined strong potential opportunities for the firm in areas such as renewable energy and infrastructure advice.
Among the deals it is currently thought to be involved in is a strategic review of Wood Mackenzie, the Scottish oil and gas consultancy, commissioned by its private equity owner Charterhouse, which could see it put up for sale.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article