LOM (Holdings) Ltd last year posted a loss of $1.47 million, driven by writedowns of the value of its stake in the Bermuda Stock Exchange and in a portfolio management system that failed to work.With one-off items stripped out, LOM’s net loss was $120,439.In a letter to shareholders, published yesterday by the Bermuda Stock Exchange, CEO Scott Lines described how 2011 had been “another year of struggle for the investment industry around the world and has been even more difficult for LOM”.The broker dealer’s assets under administration fell 22 percent to $681 million and revenues fell 5.5 percent to $8.34 million.Total costs rose 7.6 percent to $9.81 million. This increase was dominated by a charge of $750,558 to reflect the write off of CAMRA, “a portfolio management system that failed to work and which we purchased to replace our current portfolio management system”, the letter stated. With the CAMRA expense stripped out, costs fell one percent.The company took a charge of $907,948 on its holding of the BSX as a result of the pricing agreed between the Exchange and the TMX Group, when the Canadian company took a 16 percent stake in the Island bourse.LOM also made a significant write-back of $447,231, relating to Pembrook Resources, an investment “which we were required by our auditors to write down last year but this year was required to write up”, the letter stated.“It is a reality for the LOM group that our brokerage revenues (at 40 percent of our total revenues) are extremely sensitive to the state of the global equity markets,” Mr Lines wrote in the letter.“For revenues to grow we generally require an environment of low volatility with generally rising equity prices. Unfortunately we have for the last four years been experiencing the exact opposite of such a scenario.“The management has made every effort to grow our asset management business which is less directly sensitive to global equity markets. Though this effort has been successful with revenues growing 17 percent last year, it is a long slow process and cannot in the short term make up for the revenue declines in the brokerage arm. Thus we have concentrated on reducing costs as much as possible while still attempting attract new business and to recruit new brokers.”LOM said that the company had reduced staff numbers by four over the last five months through attrition and now had 25 full-time staff.“Our challenge remains to recruit and train new brokers and to attract additional customers and assets to the group while constantly driving down costs,” Mr Lines added.LOM also announced that Max Quin was appointed a director of the company at the board meeting held on April 24. Mr Quin is a consultant with Wakefield Quin Ltd and a director of various international companies both in Bermuda and abroad for certain investment funds and has extensive experience in international corporate law.At the same meeting, Danesh Varma and Malcolm Moseley resigned their positions as directors, with immediate effect. Mr Moseley continues in his role as LOM’s chief financial officer and a director and officer of each of the company’s subsidiaries.Mr Varma, who has served as a director since 2008, is expected to begin working for LOM (UK) Ltd as general manager. Mr Varma feltthat his extensive contacts and location in London would enable him to better serve the group in a business development role for LOM’s UK subsidiary.