Penson (PNSN) to Close U.K. Ops, Will Trim $6M-$7M in Annual Costs
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Penson Worldwide, Inc. (Nasdaq: PNSN) plans to close its UK operation in an orderly manner over the next few months, and to sell certain of the operation’s assets to third parties.
Exiting the UK local clearing market was one of the Company’s previously announced strategic objectives to reduce costs and debt, and improve profitability. Penson Financial Services Ltd (PFSL) of London is currently running at an operating loss of $6-$7 million on an annualized basis. Shut down costs, including severance, will be accounted for in results for the fourth quarter of 2011. PFSL has approximately 25 correspondent customers, 60 employees, and $8 million in net revenues on an annualized basis. It was accounted for as a discontinued operation in Penson’s results starting in the third quarter of 2011. Penson said it regretted closing PFSL, but that after lengthy negotiations with several leading financial organizations, it was unlikely a sale agreement of PFSL as an operating entity would have been reached in a timely manner.
Exiting the UK local clearing market was one of the Company’s previously announced strategic objectives to reduce costs and debt, and improve profitability. Penson Financial Services Ltd (PFSL) of London is currently running at an operating loss of $6-$7 million on an annualized basis. Shut down costs, including severance, will be accounted for in results for the fourth quarter of 2011. PFSL has approximately 25 correspondent customers, 60 employees, and $8 million in net revenues on an annualized basis. It was accounted for as a discontinued operation in Penson’s results starting in the third quarter of 2011. Penson said it regretted closing PFSL, but that after lengthy negotiations with several leading financial organizations, it was unlikely a sale agreement of PFSL as an operating entity would have been reached in a timely manner.
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