Direct equity groups feel market downturn
E*Trade has been one provider heavily slugged by the drop in online investing after droves of investors burnt by last year’s tech wreck have shunned the online investment world.
While E*Trade suffers, another group, ComSec is struggling with form following last years price war backfiring and slicing revenue.
E*Trade's revenue tumbled 20.6 per cent to $17.13 million for the year to June 30, with the company posting a net loss of $33.52 million. This result narrowed from the previous year's net loss of $53.88 million, but before one-off items E*Trade's operating loss improved six per cent to $10.98 million.
Despite the number of trades on the Australian Stock Exchange (ASX) plunging from last year's tech-inspired frenzy, E*Trade believes it is well-prepared for a depressed market.
Chief executive Michael Deleray says the group has restructured operations and the company is in a position to ride out a long-term slowdown. A slowdown, Deleray says could last possibly as long as two years.
At the end of June, E*Trade's unaudited cash reserves, excluding funds held in trusts, was approximately $10.1 million, although this was less than half of last year's $22.5 million.
The 2000/01 result was hit by an $11.53 million charge related to the deemed book value of milestone shares issued toANZBanking Corp as part of a three-year alliance with the bank.
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