Investment banking revenues dropped 16% to £74.3mln in the year ended 30 September due to substantial decline in UK deal activity by its mid-market client base, especially at the larger end of its typical fee range.
Capital markets fees fell 18% because of “materially lower” equity capital markets transaction volumes in the small and mid cap sector.
However, Numis said the decline in public markets deal volumes was partially offset by a “significantly improved” revenue contribution from its private markets activities, with another positive being an expansion of the group corporate client base by seven new companies to a total of 217 with a 7% increase in average market cap.
In its smaller Equities arm market share gains were not translated to revenue, which fell 21% to £37.3mln, reflecting weak UK investor sentiment and lower trading profits, with the broker noting that the UK market has not experienced a year with volatility levels this high since 2012.
With group revenue down 18%, the high operational gearing fed through to a big fall in PBT to £12.4mln, though the dividend was maintained at 12p per share.
Alex Ham and Ross Mitchinson, co-chief executives, said: “It has without doubt been a challenging year for everyone in the industry and our results have inevitably been impacted by the persistent political uncertainty, macro-economic factors and subdued, yet volatile markets.”
The pair said they were “taking full advantage of the opportunities that are presented by challenging times”, boasting the “best corporate client list we have ever had” and that Numis had made an "encouraging start to the current financial year with improved revenue performance across the business".