TIDMPEEL
RNS Number : 2599O
Peel Hunt Limited
02 October 2023
2 October 2023
Peel Hunt Limited
("Peel Hunt")
Half Year Trading Update: Revenue in line with market
expectations
Peel Hunt, a leading UK investment bank, today issues a trading
update in respect of the six-month period ended 30 September
2023.
Throughout the first half we have continued to support our
clients in navigating the prolonged period of adverse market
conditions that has persisted since the end of 2021. In line with
market expectations, Group revenue for the period is expected to be
approximately GBP42.4m, an increase of approximately 3.2% year on
year.
Our strong balance sheet provides financial resilience for the
Group and allows us to take a long-term view to build our business
for the benefit of all our stakeholders. During the period, this
long-term view has allowed us to make progress against our
strategic priorities and strengthen our position as the UK's
leading independent investment bank for mid-cap and growth
companies.
Update on business divisions
Investment Banking
We were pleased to act as joint bookrunner to FinTech business
CAB Payments on its IPO and associated equity raise of GBP335m,
making it the largest UK IPO of the year so far. Whilst revenues in
Investment Banking were significantly ahead of the same period last
year, overall deal activity has remained subdued.
We further cemented our leading position in the FinTech sector
by being appointed as sole financial adviser to the newly launched
FinTech Growth Fund. The FinTech Growth Fund, which has been
welcomed by the UK Government, has been established in response to
the Kalifa Review that identified a GBP2bn FinTech growth funding
gap in the UK. The fund is the first specialist investment fund of
its kind with plans to raise up to GBP1bn to invest in growth-stage
UK FinTech companies. This represents a significant opportunity,
with the UK being a highly attractive FinTech hub(1) .
More broadly, our diversification strategy is progressing well.
We acted as financial adviser on several UK public M&A
transactions in the period, both buyside and sellside, and expanded
our pipeline of Private Capital Markets and Debt Advisory
transactions. In addition, we won 9 high-quality mid-cap and growth
companies as corporate clients and now act as an adviser to 154
companies of which 38 are in the FTSE 350. The aggregate market
capitalisation of our corporate clients has increased by 4.6% year
on year, to approximately GBP96bn.
Execution Services
Underlying trading has been resilient despite lower market
volumes, with trading in Fixed Income, Investment Companies and
ETFs contributing to revenues that remain above pre-Covid levels.
We continue to focus on adding incremental liquidity and driving
efficiencies.
Research and Distribution
Our Research team has focused on delivering differentiated and
highly relevant mid-cap and growth company research to our
institutional clients. Following further initiations in the period
we now provide insightful analysis on over 200 FTSE 350
companies.
Institutional Electronic Trading revenues have more than doubled
year on year and we have continued to invest in talent, with key
senior hires having joined the firm during H1.
Strategic progress
REX continues to win mandates for equity raises from third party
banks, brokers and financial advisers and we are hopeful of
receiving regulatory approval for RetailBook to operate as a
standalone entity in the coming months. Our plans to fully
reinstate our European distribution capability are progressing well
and we are pleased to announce that our Copenhagen office, which is
now staffed, will be operational shortly.
Operating costs and resilience
Whilst there has been a focus on costs during the period, this
has been against headwinds of inflationary cost increases,
particularly in service provider and technology costs, with
interest rate rises impacting our debt facilities. As a result,
costs have increased broadly in line with inflation over the
period. We reduced our long-term debt by GBP6m in June, partly
mitigating some of the expected interest cost increases. Long term
debt now stands at GBP15m, down from a peak of GBP30m in September
2021. We continue our long-standing relationship with Lloyd's,
having renewed our GBP30m RCF in September for another year. The
RCF provides additional liquidity for the business as and when
needed and is currently undrawn.
Changes to regulatory landscape
We welcome the progress of the current reform agenda to
encourage investment into UK public and private capital markets and
reverse the structural trend of de-equitisation. To ensure that
reforms deliver the desired impact for UK plc and our clients, we
continue to be an active participant in discussions, and in
particular welcome the debate over ISA and pensions reforms to
encourage investment in UK listed companies. We encourage all
stakeholders to make rapid progress on the reform agenda.
Outlook
Whilst exact timing of recovery cannot be predicted, there are
encouraging signs that interest rate rises are bringing inflation
under control, and we may be nearing the end of the current
tightening cycle. We have the balance sheet strength and regulatory
capital to weather the remainder of this cyclical downturn and are
well positioned to benefit from the strength of our platform and
considerable operational gearing as market conditions
normalise.
Peel Hunt will announce half year results for the six-month
period ended 30 September 2023 on 5 December 2023.
For further information, please contact:
Peel Hunt : via Powerscourt
Steven Fine, CEO
Sunil Dhall, CFOO
Powerscourt (Financial PR): +44 (0)20 7250 1446
Justin Griffiths
Gilly Lock
Russ Lynch
peelhunt@powerscourt-group.com
Grant Thornton UK LLP (Nominated Adviser) : +44 (0)20 7728
2942
Colin Aaronson
Samuel Littler
Keefe, Bruyette & Woods (Corporate Broker) : +44 (0) 20 7710
7600
Alistair McKay
Alberto Moreno Blasco
Fred Walsh
Akshman Ori
References
(1) 16 August 2023 - FinTech Growth Fund (FGF): The dawn of a
new epoch ( https://www.peelhunt.com/news-events/articles / )
Notes to editors
Peel Hunt is a leading UK investment bank that specialises in
supporting mid-cap and growth companies. It provides integrated
investment banking advice and services to UK corporates, including
equity capital markets, private capital markets, M&A, debt
advisory, investor relations and corporate broking. The company's
joined up approach combines these services with expert research and
distribution and an execution services hub that provides liquidity
to the UK capital markets, delivering value to global institutions
and trading counterparties alike. The company is listed on AIM
(LON: PEEL) and has offices in London, New York and Copenhagen.
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END
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