The Global Capital financial services group had reported a pre-tax profit of Lm151,862 (€353,743) for the year ending on December 31, 2007, down sharply from Lm3,171,685 (€7,388,039) in the previous year.

"The year under review was characterised by a severe downturn in the capital markets which had an adverse effect on the results and operating performance for the year. This scenario is expected to persist in the near term," the group said.

It said income from performance fees has decreased by Lm2,449,664 (€5,706,182) from Lm2,507,472 (€5,840,839) to Lm57,808 (€134,656).

"The turmoil within the capital markets has also affected investor confidence which impacted the sale and distribution of investment products," the group said.

It added that its insurance segment continued to register progress, with premiums written rising to Lm5,423,888 (€12,634,260) compared with Lm4,169,850 (€9,713,138) in 2006. However this segment's performance was also adversely impacted by the capital markets' performance which prevailed in 2007.

Turnover in agency and brokerage services increased to Lm819,246 (€1,908,330) in 2007 compared to Lm549,261 (€1,279,434) in 2006. This also led to a segment result of Lm277,687 (€646,837) in 2007 compared to Lm14,410 (€33,566) in 2006.

The property segment had a turnover of Lm468,621 (€1,091,593) in 2007 compared to Lm79,934 (€186,196) in 2006.

"Despite the prevailing environment in the local and international capital markets, the Group is well-positioned to take advantage of an upturn in due course. The Board is of the view that there are imperfections in the market and therefore opportunities, including acquisitions, are being actively pursued," Global said.

The directors are not recommending a dividend.