Peel Hunt reports solid first half but warns of political uncertainties

1st Oct 2024 07:21

(Sharecast News) - Peel Hunt reported a strong first-half financial performance on Tuesday, with group revenue rising 25% year-on-year to £53.3m, up from £42.7m a year earlier.

The AIM-traded firm said its growth was driven by a more favourable macroeconomic environment and the successful completion of several merger and acquisition advisory mandates during the period.

Its investment banking division saw an improved performance, particularly in equity capital markets (ECM), despite muted market-wide ECM activity.

The bank served as joint global coordinator for a main market initial public offering, and as nominated adviser and sole bookrunner for an AIM IPO.

Merger and acquisition advisory fees also made a significant contribution to deal revenues, including fees from a major transaction completed in the first half.

In the research and distribution segment, revenues were modestly higher compared to the same period last year.

The increase came despite continued outflows from UK equities, as Peel Hunt continued to enhance its services for clients, particularly in merger arbitrage and electronic trading.

Execution services also saw increased trading activity in the first four months, though volumes had recently slowed due to uncertainties surrounding the UK Budget and the upcoming US elections.

Strategically, Peel Hunt said it continued to invest in talent, with key hires in its investment banking division across the financials, consumer, industrials, and technology sectors.

The firm also strengthened its European distribution platform amid consolidation in the sector, positioning itself as a leading independent UK-focused investment bank.

Peel Hunt added that it had expanded its corporate client base, now acting for four FTSE 100 and 42 FTSE 250 companies.

The average market capitalisation of its retained clients had increased by 38%, and their aggregate market value had risen by 29% to £124bn.

Looking ahead, Peel Hunt noted the slowdown in market activity in recent weeks due to the upcoming UK Budget and US elections.

However, it said it expected to meet full-year market expectations, and believed it was well-positioned to capitalise on increased market activity once confidence returned.

The company said it would release its full half-year results on 29 November.

At 0804 BST, shares in Peel Hunt were down 1.17% at 127p.

Reporting by Josh White for Sharecast.com.