REG - Peel Hunt Limited - Half Year Trading Update

Peel HuntAnnouncement

02/10/2023 07:00

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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 £42.4m, 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 £335m, 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 £2bn
FinTech growth funding gap in the UK. The fund is the first specialist
investment fund of its kind with plans to raise up to £1bn 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 £96bn.

 

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 £6m in June, partly
mitigating some of the expected interest cost increases. Long term debt now
stands at £15m, down from a peak of £30m in September 2021. We continue our
long-standing relationship with Lloyd's, having renewed our £30m 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 (mailto: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
(https://www.peelhunt.com/news-events/articles/fintech-growth-fund-fgf-the-dawn-of-a-new-epoch/)
/)

 

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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