Peel Hunt Ltd (AIM:PEEL), which floated in London last autumn, saw a sharp drop in full-year revenue and profit following what the company described as “exceptionally low levels of capital markets activity” in the second half.
Revenue in the year to 31 March 2022 came in at £131mln, down from £196.9mln the year before but ahead of revised analyst expectations, the investment bank revealed in its results statement.
Profit before tax slumped to £41.2mln from £120.1mln, against exceptional comparatives in the prior year, after market activity and volumes declined from the highs of the Covid-19 pandemic.
“Market conditions were challenging in the second half, particularly in the last quarter where exceptionally low levels of capital markets activity were experienced market wide,” the company said.
It predicted that equity capital market (ECM) activity in the first half of the current year will continue in line with last year’s final quarter.
But said it is “hopeful” that market conditions in the second half "will support execution of our strong pipeline of investment banking transactions”.
The group’s investment banking business reported a 32% rise in revenue to a record £57.9mln last year. It executed 46 fundraises, making it “the most active investment bank” in UK ECM transactions.
Revenue from the execution services business fell to £42.9mln from £116.7mln, while research & distribution revenue dropped to £30.2mln from £36.3mln.
It gained 19 new corporate clients, with another four added since the year end, bringing the total to 164, of which 35 are in the FTSE 350.
Net assets grew 107% to £100.1mln.
The company proposed a final dividend of 3.1p.
Shares were 4.27% lower at 112p in midmorning trade.