Peel Hunt (PEEL) H2 2024 earnings summary

Executive summary

• Revenue increased 4.3% year-over-year to £85.8m, but the group reported a loss after tax of £3.2m and a loss before tax of £3.3m, reflecting ongoing cost pressures and strategic investments.

• Investment Banking revenues rose 39.1% to £32.6m, driven by strong M&A activity and new client wins.

• The client base evolved towards higher quality, with the average market cap of clients rising to £820m and notable wins including Hiscox and Renishaw.

• Peel Hunt opened a Copenhagen office, reinstating pre-Brexit European access, and advanced technology initiatives, including AI and the operationalisation of RetailBook.

• Balance sheet remains strong with net assets of £91.8m and cash of £37.9m, comfortably above regulatory requirements.

Financial highlights

• Revenue for FY24 was £85.8m, up from £82.3m in FY23; loss before tax widened to £3.3m from £1.5m.

• Net asset value at 31 March 2024 was £91.8m, down 1.5% from the prior year.

• Cash position increased to £37.9m, including a £15m RCF drawdown to support client facilitation trades.

• Staff costs rose 5% year-over-year, with a compensation ratio of 59%.

• No dividend proposed for the year.

Outlook and guidance

• Macroeconomic conditions are improving, with inflation falling and anticipated rate cuts by the Bank of England and Fed.

• Public M&A activity remains strong, and the UK IPO market is selectively open, with Peel Hunt leading recent high-profile deals.

• Execution Services and Institutional Trading activity is up year-over-year, and meaningful fees from FY24 deals are expected to be collected in FY25.

• Strategic investments and resilient balance sheet position the group to benefit from market upturns.

• Peel Hunt positions itself as the only independent UK midcap and growth-focused investment bank amid industry consolidation.