Plunging stock markets have put an end to the lucrative IPO

Plunging stock markets have put an end to the lucrative IPO pipeline and put the institutional fund management division under pressure. That was the reason behind a warning in February that losses for the year could total £4m. In fact the figures came in slightly ahead of that forecast with a £3.8m deficit but it didn’t help the shares which were left unchanged at 49.5p This is a fraction of their 349.5p peak in early 2000. But it is still well ahead of the issue price of 23p in 1998.T&G is sensibly cutting costs to adapt to tougher times.

It has axed 20 per cent of its cost base including a reduction in staff from 300 to 245. As a result, T&G should be back in the black in the current year.T&G has expanded its investment funds business with the poaching of the country fund team from Bear Stearns. And its corporate finance division now has more retained clients which partially offsets the lack of float fees. Strategically it would like to buy another smaller company broker though there is nothing on the radar just now.

T&G is essentially a bet on the market and that looks a bit scary at the moment. But it could look attractive if markets begin to look like they have stabilised.. The departure of Jean-Marie Messier from the helm of Vivendi Universal was supposed to mark a turning point for investors. Instead, it has proved to be a mere staging post in the accelerating meltdown of this one-time but short-lived media colossus. The damage was done by a Moody’s junk bond rating on Vivendi’s debt and a front-page story in Le Monde claiming that it had attempted to flatter last year’s profits by €1.5bn with some smart accountancy footwork.No matter that the essence of the allegations was old or that Vivendi subsequently issued a statement insisting that the US Securities and Exchange Commission has been happy with its actions, if not the French stock market regulators.In the febrile, post-WorldCom atmosphere which grips the equity markets today, anything which hints at wider accounting problems is guaranteed to spook investors and so it proved in London.But for now the immediate problem is what to do with Vivendi. The company was trundling along quite happily as a dull old water utility until Mr Messier took it by the scruff of the neck and transformed it into the world’s second biggest media group by acquiring Universal and its roster of rock stars and Hollywood studios.Today, the business is worth much less on the stock market than the valuation of its component parts – a reflection of the mountain of debt it carries and fears about what may be buried beneath. But would the banks countenance a fire sale of those assets? The most obvious move would be the disposal of its French interests – the television channel Canal+ and its stake in the mobile operator SFR.