LOM Financial reported a 14.7 per cent fall in first-half earnings despite higher revenue, as rising operating costs outpaced growth in its core wealth management and brokerage businesses.

The Bermuda Stock Exchange-listed financial services group posted net earnings of $2.35 million for the six months ended June 30, down from $2.75 million in the corresponding period last year. Basic earnings per share fell to 48 cents from 56 cents.

Overall revenue increased 6.4 per cent year on year to $12.1 million, driven by continued growth in management fees and brokerage activity.

Scott Lines, the chief executive officer of LOM, said management and investment advisory fees rose 16.7 per cent as the company attracted new assets while existing portfolios grew in value.

Brokerage activity increased 14.5 per cent as investors traded heavily during this year's artificial intelligence-driven market rally.

However, net interest income declined 12.2 per cent as clients reduced borrowing, while trading gains on securities owned fell 66 per cent compared with the first half of 2025.

Operating expenses rose 13.1 per cent, including a 9.8 per cent increase in staff costs. Mr Lines also attributed higher costs to fluctuations in the US dollar-UK pound exchange rate, which affected the translated value of the company's sterling-denominated securities.

He said costs would rise again in the second half as LOM builds a new IT development unit, although the increase is expected to be more modest than over the past year.

“The expected efficiency gains should make the business more scalable,” Mr Lines said.

Despite lower earnings, LOM's assets under administration increased to $2.3 billion at June 30, up from $2.1 billion at the end of 2025.

The company reported shareholders’ equity of $48.1 million and cash and cash equivalents of $23.9 million at the end of the period.

Its book value stood at $9.83 per share, compared with a Bermuda Stock Exchange share price of $8.15, giving the company a market capitalisation of $39.9 million.

The board has also approved the continuation of its share buyback programme, authorising the repurchase of up to 400,000 shares to be held in treasury. During the first half, LOM bought back 30,000 shares at an average price of $7.86.

In his letter to shareholders, Mr Lines said the first half of the year had been dominated by strong gains in semiconductor and AI-related stocks, although investor enthusiasm had cooled in recent weeks amid questions over whether the hundreds of billions of dollars being invested in artificial intelligence would generate sufficient long-term returns.

He also pointed to changing monetary policy, saying many central banks had paused or reversed expected interest rate cuts because of geopolitical tensions, higher energy prices and persistent inflation in services.

Mr Lines said the US Federal Reserve had adopted a “wait and see” approach, with policymakers remaining concerned about resilient labour markets and supply-side constraints despite moderating inflation.

• See the full letter to shareholders under Related Media

• This story was generated by machine and edited by The Royal Gazette newsroom

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LOM 2026 half-year results