LOM Financial Ltd’s 2015 earnings fell as brokerage revenues declined, but assets under administration rose helped by strong performance of its mutual funds.

The Bermuda Stock Exchange-listed broker-dealer said net income last year was $141,528 or 2.3 cents per share, down from the $306,891 reported in 2014.

Brokerage revenues fell 14 per cent to $2.26 million, but this was offset by a 15 per cent increase in asset management revenues to $2.89 million.

LOM said a one-off writedown of long-term securities held as investments was a major factor in the fall in profit.

The firm’s assets under administration were $635 million at the end of last year, an increase of $20 million from a year earlier.

In a letter to shareholders, chairman and chief executive officer Scott Lines said the firm was in “transition to a more revenue stable business”.

“Our exposure to securities brokerage activity has continued to mean our revenues are highly volatile,” Mr Lines wrote.

“Though we are finding it very difficult to recruit or train successful new financial advisers, we continue to invest in head hunters in order to identify and propose suitable candidates.”

Total operating costs increased 2 per cent.

Mr Lines said that although strict cost controls were in place at LOM, the firm had invested in staff and its IT systems to improve customer service, enhance security and increase efficiency.

And he highlighted the performance of the firm’s mutual funds.

“Over the past five years, our LOM Global Equity Fund has returned a total 25.99 per cent for our investors, or an average of 4.73 per cent annually, while the Bloomberg Global Equity Offshore Universe of our peer group competitors returned 11.37 per cent, or just 2.18 per cent annually for the same period.

“Likewise, our LOM Balanced Fund has returned 4.49 per cent versus a negative 3.26 per cent for our peer group competitors.”

The company had net equity of $16.52 million and no debt at the end of last year. During 2015, it increased its cash and cash equivalents to $4.48 million, representing 27 per cent of shareholder equity.

Book value at December 31, 2015 was $2.74 per share. LOM’s share price closed at $2.30 on the BSX yesterday.

Mr Lines added: “As business activity remains subdued, the board of directors of LOM have decided not to pay a dividend.”

The board approved authorisation for LOM to to buy back up to 200,000 shares for cancellation. During 2015, the company repurchased 38,120 shares.