Peel Hunt revenues rise, but losses widen

Investment banking and broking firm Peel Hunt reported resilience despite ongoing challenges in capital markets in its full-year results on Thursday, with a 4% increase in revenue to £85.8m.

However, continued cost pressures led to a loss before tax of £3.3m, widening from a £1.5m loss in the prior year.

Basic losses per share widened to 2.7p from 1.1p in 2023, and the company did not declare a dividend for the year.

The company's balance sheet remained robust with net assets of £91.8m and a 38.3% increase in cash balances to £37.9m - well above regulatory requirements.

Peel Hunt said its investment banking division saw significant growth, with revenues rising 39.1% to £32.6m and 18 new client acquisitions, bringing the total to 150 corporate clients, including 43 in the FTSE 350.

Conversely, execution services revenues declined to £29.6m, reflecting the broader market's lower trading volumes.

Revenue from research and distribution also saw a decline, of 5.9% to £23.6m, in line with market trends.

Strategically, Peel Hunt reported progress, noting that the average market capitalisation of its corporate clients rose by 9% to £752m, outperforming the FTSE All-Share Index.

The company also expanded its European operations with the opening of Peel Hunt Europe in Copenhagen and strengthened its team with key hires in investment banking and institutional electronic trading.

Additionally, RetailBook - a platform aimed at enhancing retail investor participation - received FCA approval for its next growth phase.

Looking ahead, Peel Hunt said it was optimistic about the improving macroeconomic environment, with inflation rates falling and potential lower interest rates.

Increased activity in execution services and institutional trading, coupled with a rise in public mergers and acquisitions and budding equity capital markets (ECM) activity, suggested a “cautiously optimistic” outlook for a broader recovery in ECM activities.

“Despite the challenging market backdrop, revenues have grown year on year and, whilst this wasn't quite sufficient to offset the inflationary cost environment, the business is well positioned as capital markets activity builds,” said chief executive officer Steven Fine.

“During the year we made good strategic progress, winning some of our largest corporate clients to date and building ever stronger relationships with our existing client base.”

In addition, Fine said the firm opened its Copenhagen office and its retail access product RetailBook raised funds to start its journey as an independent fully-regulated business.

“We are seeing tentative signs that a recovery from the lows of the last two years is underway, and we are delighted to have supported two clients with their initial public offerings on the London market as announced this month.”

At 0821 BST, shares in Peel Hunt were down 3.97% at 133p.

Reporting by Josh White for Sharecast.com.