Peel Hunt ready for the rebound, boss says as firm slips to small loss
Investment bank Peel Hunt has swung to a pretax loss as a prolonged period of subdued capital markets activity continues to take its toll.
In its half-year results today, the firm said pretax loss came in at £0.8m, down from a £0.1m profit in the same period last year – which itself was a 99 per cent plunge from 2021.
Peel Hunt said the loss represented “the challenging macroeconomic environment and inflationary increases in costs”.
Assets fell to £92.8m from £93.1m, with cash balances sinking to £22.6m from £27.4m.
The firm has been among scores of mid-market banks to be hit by a downturn in dealmaking this year.
The slump has triggered a period of consolidation, with London-listed rivals Numis and FinnCap both striking deals for scale.
Peel Hunt pointed out that its revenue of £41.1m was up four per cent and remained above pre-Covid levels despite lower market volumes.
The investor said increases in interest costs were partly offset by long-term debt falling to £15m from £21m in its half-year update to markets this morning.
The number of investment banking clients fell by one to 154, while the average market cap of each client fell by almost 10 per cent to £622.6m.
“Our performance was not quite enough to offset the high inflationary environment and its impact on costs but our balance sheet remains strong, demonstrating the group’s financial resilience,” chief executive Steven Fine said.
“Our integrated full-service investment banking offering is a significant differentiator for Peel Hunt. We continued to make good progress with our strategic priority to diversify our investment banking capabilities, winning new mandates in M&A advisory and developing a growing pipeline in private capital markets and debt advisory.
“This diversified business model, coupled with a solid financial position, means we are well positioned for when market conditions improve.”