City broker Numis Corporation PLC (LON:NUM) cautioned today that its first-half total income will be “moderately below” last year’s level as a low volume of deal-making has countered the benefit of a rise in UK equity markets.
In a trading update for the six months to March 31, Numis said: “The steady rise in UK equity markets has been helpful to our Equities revenues, comprising institutional commissions and trading, which continue to outperform historic levels.”
But, it added: “Conversely, we have seen a paucity of primary equity issuance in the UK market as a whole and the increase in M&A activity has yet to fully benefit our top line.”
The broker continued: “Whilst we are not immune to such conditions, the corporate side of our business has experienced higher transaction volumes in non-primary activity than the same period last year, reflecting the quality of our client base.”
The group added: ”Net income from our strategic investments has outperformed the first half of 2016 and we continue to explore opportunities for re-cycling the portfolio where we see attractive investment propositions, which are strategically relevant.”
Confident on full-year ...
Numis concluded: “We have a number of corporate transactions which are due to complete in April 2017 and based on the strength of our pipeline, we remain confident in the outturn for the full year.”
Numis' will unveil its half year results on May 8.
In reaction to the slightly cautious comment, Numis shares were 0.5%, or 1.25p lower at 245.0p in late afternoon trading.
Earlier today, fellow small and mid cap-focused City broker Cenkos Securities PLC (LON:CNKS) reported a slump in 2016 results on the back of lower equity fund-raisings by clients in the first-half due to Brexit vote uncertainties, although its second-half saw an improved performance.
For the year ended 31 December 2016, Cenkos saw its pretax profits drop by 78% to £4.4mln, down from £19.9mln a year earlier, as revenues fell by 43% to £43.7mln from £76.5mln.
But, it added, after generating revenues of £15.3mln in the first half, its performance improved in the second half.
Cenkos shares shed 1.6%, or 1.5p at 92.5p.