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GMP Capital Inc. CEO Kevin Sullivan.

A lot can change in the space of a quarter. Especially for an independent brokerage on Bay Street.

January was pretty much the nightmare scenario for the industry. Crude was trading in the region of $30 (U.S.) a barrel. Underwriting was dead and trading activity was moribund. A number of smaller independents had recently gone out of business, and many observers figured more closings were coming.

Then, seemingly out of nowhere, things got better. Big-capitalization Canadian companies such as Franco-Nevada Corp., Enbridge Inc. and TransCanada Corp. started doing sizable secondary stock offerings. Oil perked up, too. Suddenly there was work to be done for the dealers.

GMP Capital Inc.'s first-quarter results, released Thursday, point to the worst possibly being over at the firm. But it's also clear that, despite coming through one of the most volatile periods in memory, the firm isn't out of the woods yet.

Canada's second-largest independent brokerage reported a material improvement in its bottom line. GMP pared back its loss to $3.6-million in the first quarter of 2016 from $8.9-million in the same period in 2015.

The improvement was largely down to relentless cost cutting that has seen GMP save in the region of $40-million over the past year. A big chunk of the cost savings stemmed from a restructuring announced in January that saw the firm lay off around one-quarter of its staff, shutter operations in Britain and Australia, and suspend its dividend.

Expenses are finally cooling off, as well, in the Houston office, which GMP set up in 2013 to take advantage of the then-hot energy market. To attract staff, GMP offered bankers fixed salaries for a set period of time. After the energy market cratered in mid-2014, the Houston office became an albatross for GMP – all costs and little or no payoff. Now, at least those salary guarantees are coming off.

With much of the heavy lifting done on the expenses front, the problem for the firm now is revenue – or lack thereof.

GMP has said that it needs to generate in the region of $50-million in revenue per quarter to break even. It's getting close but it's not there yet. In the most recent quarter, GMP brought in $45.9-million. (Much better than $35.4-million in the fourth quarter.)

GMP outperformed in mergers and acquisitions advisory revenue in the first quarter, but it was weak in underwriting – an area that has historically "driven the bus" at the broker when revenue "is really humming," Scotia Capital analyst Sumit Malhotra pointed out during Thursday's conference call.

GMP hasn't benefited in a big way from the bevy of bought deals that hit the market over the past few months. Much of the riches have instead gone to the bank-owned dealers and Calgary-based independents such as Peters & Co. Ltd. and FirstEnergy Capital Corp.

Harris Fricker, the company's long-standing chief executive officer, addressed the matter head on during the call with analysts:

"The market during the turbulent times has been less receptive to small- and mid-cap entities," he said

"We've seen large-cap entities certainly access the market quite aggressively [in the past few months]," and that's not where we really add value."

Mr. Fricker says he is "guardedly optimistic" that the market for small- and mid-cap stock offerings will improve over the next two quarters.