Peel Hunt Ltd on Thursday said that revenue has dropped following ‘exceptionally low levels of capital markets activity’, but it remains positive for the second half of financial 2023.

Shares in the London-based investment bank were down 2.6% to 114.00 pence each in London on Thursday afternoon.

Peel Hunt began trading on London’s AIM market in September, at a price of 228p per share. On its AIM debut, the company raised £112 million in a placing of 49.1 million shares.

Shares are currently 51% behind this IPO price.

Peel Hunt said revenue in the year to March 31 was down 34% to £131.0m, from £196.9 million year-on-year. Despite this sharp fall in revenue, the company said results remained ahead of revised analyst expectations and that prior year results were ‘exceptional’.

Further, actual pretax profit in financial year 2022 fell by 66% to £41.2 million, compared to £120.1 million the year prior.

Illustrative pretax profit - which reflects what results would have been if the corporate structure reorganisation and IPO had it taken place before March 31, 2020 - also fell by 57% to £33.1 million, from £77.0 million last year.

Peel Hunt said that the fall in revenue and profit were linked to ‘exceptionally low levels of capital markets activity’, which were experienced market wide, it explained.

Whilst year-on-year profit and revenue fell, the company said that all three business divisions, investment banking, execution services and research & development, made progress.

In particular, the investment banking arm achieved record results for its second consecutive year with revenue up 32% to £57.9 million.

However, revenue from the execution services division dropped to £42.9 million from £116.7 million, while research & development revenue fell to 30.2 million from £26.3 million.

Peel hunt also said that it had gained nineteen new corporate clients, with another four since the year end, bringing the current total number of corporate clients to 164.

Further, in line with the company’s dividend policy the board proposed a final dividend of 3.1 pence.

Looking forward, Peel hunt expects that the equity capital market activity in the first half of the current financial year will continue in line with last year’s final quarter.

However, it remains ‘hopeful’ that market conditions in the second half of financial year 2023 will be more ‘supportive’.

Chief Executive Steven Fine said: ‘I’m grateful to our outstanding team for their dedication in a challenging year, which included our own IPO and navigating volatile market conditions in the period since, particularly in the last quarter of our financial year.’

‘We are continuing to invest in the business to drive long-term growth, having made good progress against our strategic priorities. This includes investing in our US distribution capability, progress towards establishing our expanded platform in the EU and ongoing investment in our digital strategy,’ he added‘

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