Investment bank Peel Hunt Ltd (AIM:PEEL) saw an improved performance in its core equity capital markets business in the first half, but anxieties surrounding Labour’s Budget stymied progress in the tail end of the period.
An uptick in M&A advisory and equity fundraising fees allowed Peel Hunt to swing into profit following last year’s lossmaking first half, but “volumes reduced towards the end of the period given uncertainty around the UK Budget and US election”, said the group.
The market feared a punitive Budget under chancellor Rachel Reeves, particularly in the small-cap space, where investors faced rising inheritance tax charges.
Reeves ultimately opted against entirely removing inheritance tax reliefs, but Peel Hunt expects a cautious atmosphere to linger.
The company stated: “Trading in the first few weeks of our second half is in line with management expectations.
“Although we have a solid pipeline of corporate transactions, including M&A and IPOs, we expect a degree of uncertainty to persist in the short term and consequently some of these transactions are more likely to execute in our next financial year.
“Whilst sentiment in the UK has dipped following the Budget and increased concerns around global trade are suppressing risk appetite, UK economic fundamentals and consensus forecasts for growth remain stable.”
On the top line, Peel Hunt grew group revenues by 26% year on year to £53.8n million in the six months to 30 September, trickling down to a £1.2 million profit before tax compared to an £800,000 loss before tax in last year’s first half.