Numis hails 'very strong' start to year, revenues 'significantly' ahead

AIM-listed institutional stockbroker Numis hailed a "very strong" start to the year on Tuesday, with revenues "significantly" ahead of the same period a year ago and continued momentum across the business.

In an update for the period from 1 October 2017 ahead of the company's annual general meeting later, the company said it benefited from a rise in overall transaction volumes and materially higher average fees compared to a relatively slow start the year before.

Numis said its performance was underpinned by "robust" trading across both the equities and corporate broker & advisory divisions. Its retained corporate client base continues to deliver high quality transaction activity, with revenue growth driven mostly by a pick-up in clients accessing the equity capital markets and greater M&A derived revenue.

During the period, the company acted on the $546m equity raise for Catco Reinsurance, the IPO of Sabre Insurance Group and as financial adviser in relation to the £281m recommended cash offer for SQS Software Quality Systems AG.

Meanwhile, the equities division continued the good performance from the second half of the previous year, delivering revenue "materially ahead" of the same period last year.

Numis said that while it's too early to assess the financial impact of MiFID II, which came into effect at the start of January, it is encouraged by the level of engagement and response from its institutional clients, which it said is indicative of the overall strength of its research, sales and execution capability.

"Our current pipeline is promising, including IPOs, capital raising and M&A opportunities. Converting this will, as ever, depend on favourable market conditions continuing. However we believe the business is well positioned following a strong start to the financial year."

At 1120 GMT, the shares were down 2.2% to 319p.