FCStone needs volume rise for moves to pay off

Investor confidence remains battered after the shock collapse of MF Global at the end of October, which revealed that customer funds held in segregated accounts at one of the largest commodities brokers were missing.

"It's tough," he said. "We're not happy with our performance. We've taken some transformatory steps at an attractive cost. Down the road, they will pay off," he said.

The broker, created through the 2009 merger between International Assets Holding Corp and FCStone Group, has grown aggressively through a series of large acquisitions in recent years. Its first fiscal quarter was particularly busy in that sense.

The company gained 3,000 customer accounts and 800 new commercial corporate clients from MF, as well as its UK metals team.

But investor confidence has not yet recovered.

"Our embedded customer (base is) bigger, but they're not doing as much as before, so it's not very helpful now," said Chief Financial Officer Bill Dunaway.

Costs associated with new customers and the new UK metals team and integrating the team with UK-based broker Ambrian Commodities also ate into the bottom line.

O'Connor hopes the new customers and the enlarged British metals businesses will have a positive impact by the end of the fiscal year at September 30.

"In the long term, we need some help from the market, but by the fiscal year-end, we should hit our targets," said O'Connor.