Mid-sized City investment bank Peel Hunt Ltd (AIM:PEEL) has reported a return to underlying profit for the past year, as revenues were lifted by M&A and trading activity amid a continued dearth of IPO action.
However, the company, which has 52 clients among FTSE 350 companies and five in the FTSE 100, did advise on two of the three "major" London IPOs and 15% of UK public M&A deals in the year to end March.
And it said the challenging market conditions of February and March, has seen its new financial year start "more positively", with a rotation out of US assets into Europe and "greater institutional positivity towards the UK", with M&A "highly active with a strong pipeline of transactions".
While equity market activity in the UK remains "generally subdued", Peel Hunt said it "could gain traction should macroeconomic conditions continue to stabilise."
Revenues were increased 6% to £91.3 million and an adjusted profit before tax of £0.8 million was reported, compared to an adjusted loss of £2.7 million the previous year. Statutory losses before tax remained broadly flat at £3.5 million, mainly due to restructuring costs.
Execution services revenue – that is, carrying out trade for institutional clients – rose to £33.7 million from £29.6 million, research & distribution revenue increased to £26.1 million from £23.6 million, while investment banking revenue fell to £31.5 million from £32.6 million.
The adviser and broker expanded its European electronic trading platform and received regulatory approval in principle to open an office in Abu Dhabi. The RetailBook joint venture completed several fundraises, hired key personnel, and became operationally independent during the year.
Chief Executive Officer Steven Fine said: "In challenging markets, we have delivered an improved revenue performance through our continued focus on diversifying our business and being a trusted advisor to high-quality clients."
Despite the mixed market backdrop, he hailed various milestones for the firm, including working on the most successful European IPO of the year and the company's largest M&A transaction to date.
"As we continue to make strategic progress, we enter our next financial year well positioned. In the year ahead we will continue to build the business and drive further efficiencies as we target sustained profitability," Fine said.