Peel Hunt Ltd on Thursday said revenue growth failed to fully mitigate the impact of the inflationary conditions hurt the City broker’s bottom line, but it said the London’s IPO market is starting to come back.
The London-based firm provides investment banking, advisory and capital markets services, as well as research & distribution and a trading platform.
In the financial year that ended March 31, pretax loss widened to £3.3 million from £1.5 million the previous year, driven by increased cost pressures.
Total revenue rose 4.2% to £85.8 million from £82.3 million.
Investment Banking revenue increased 39% to £32.6 million with the firm winning over 18 new clients in the period. As it stands, 43 of the Peel Hunt’s 150 clients are FTSE 350 constituents.
Meanwhile, Execution Services saw revenue fall 12% to £29.6 million and Research & Distribution revenue declined 5.9% to £23.6 million.
Chief Executive Officer Steven Fine commented: ‘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.’
Peel Hunt made an effort to reduce costs, including minimising interest costs by accelerating debt repayments with long-term loans falling to £9.0 million from £15.0 million.
Looking ahead, management is cautiously more confident of a broader recovery in equity capital market activity as UK inflation and interest rates trend downwards.
‘Equity capital markets activity is beginning to build from the low levels of the last two years and, whilst the IPO market has not yet fully re-opened, UK investors are increasingly receptive to high-quality companies,’ Peel Hunt said, noting it is working on the two recent initial public offerings in London.
These are computer maker Raspberry Pi Ltd and medical technology firm AOTI Inc.
Peel Hunt shares were down 4.9% to 131.76 pence each in London on Thursday morning.
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