Bloomberg News

Greenhill Fourth-Quarter Profit Surges as Fee Revenue Rises

January 26, 2012

(Updates with CEO quote in fourth paragraph, advisory fee revenue in seventh.)

Jan. 25 (Bloomberg) -- Greenhill & Co., the advisory firm founded by Robert Greenhill, reported profit increased eightfold as advisory-fee revenue surged.

Fourth-quarter net income rose to $16.1 million, or 53 cents a share, from $1.99 million, or 6 cents, a year earlier, the New York-based company said today in a statement. The average estimate of seven analysts surveyed by Bloomberg was 61 cents. Full-year profit increased 29 percent to $44.6 million, from $34.5 million in 2010. The profit was reduced by costs tied to the death of two executives in a New Jersey small-plane crash last month.

Greenhill Chief Executive Officer Scott Bok, 52, has said global mergers and acquisitions are in a cyclical upswing. The company ranked 42nd on the financial advisory league tables in 2011, according to data compiled by Bloomberg. Greenhill and Citigroup Inc. are advising Roche Holding AG, the world’s biggest cancer-drug maker, on its $5.7 billion hostile bid for San Diego-based Illumina Inc., a provider of genetic analysis services.

“Nearly half of our revenue was generated outside North America, with Australia making a particularly strong contribution and Europe also showing improvement,” Bok said in the statement.

Results included a compensation charge connected to the accelerated vesting of restricted stock awards to two managing directors killed in the plane crash. Jeffrey Buckalew and Rakesh Chawla, and Buckalew’s wife Corinne and two children, died Dec. 20 when the single-engine plane crashed onto a highway.

Excluding the charge, net income for the fourth quarter was $20.4 million, or 67 cents a share, and $48.9 million for 2011, according to the statement.

Advisory Fees

Advisory fees for the three months ended Dec. 31 rose to $85.5 million from $56.7 million. That helped lead a 53 percent jump in fourth-quarter revenue to $94.5 million from the year- earlier period.

Greenhill earned advisory revenue from 160 different clients in 2011, a 14 percent increase from 2010, according to the statement. The firm earned fees in excess of $1 million from 74 clients during the year, up from 57 in 2010.

Excluding the charge, Greenhill set aside $47.1 million for compensation in the fourth quarter, or 50 percent of total revenue, up from $45.2 million, or 73 percent, in the year- earlier period. Full-year revenue increased to $162.6 million $159.9 million in 2010..

Appointments

As a result of the deaths of Buckalew and Chawla, Greenhill said Chief Financial Officer Richard Lieb will head North American corporate advisory while retaining his role as CFO. Bradley Robins will lead the financing advisory and restructuring group in the region. Harold Rodriguez will become chief operating officer and retain his position as chief accounting officer. The firm named five new managing directors as part of its annual evaluation and promotion process.

Lieb said on a conference call after results were announced that he doesn’t expect Greenhill to cut staff and that the firm could grow on a “selective basis.”

Greenhill’s board authorized the repurchase of $100 million in shares during 2012, according to the statement.

Greenhill rose 2.1 percent to $43.94 in New York trading. The shares have gained 21 percent this year.

--Editors: William Ahearn, Rick Green

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net.

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.


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