Good boxers roll with the punches. Facing a tougher market for institutional research and execution, Numis (NUM) is doing the same: shifting its weight towards corporate advice, particularly on equity issuance and M&A, as it looks to defend its revenues.
There is some defending to do. Net income from institutional clients - for whom the company provides equity research and execution services - fell to £15.4m in the first half, down just over a third on the same period last year. Management said a lack of market confidence at the beginning of the period depressed appetite for UK equities, while competition from electronic trading systems had intensified. Appetite for research is also threatened by incoming regulation that prevents managers from paying for it using client funds.
But on the other side of its business Numis grew corporate transaction income by 7 per cent year on year to £25.9m. Part of this growth is M&A work: Numis advised on Micro Focus's reverse takeover of software company Attachmate, and is currently joint adviser on construction group Kier's acquisition of repair services company Mouchel. Numis also completed 23 equity raisings in the period, including six IPOs, which tracks fairly well against the 44 raisings completed in the whole of last year.
| NUMIS CORPORATION (NUM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 238p | MARKET VALUE: | £267m | |
| TOUCH: | 238-244.8p | 12-MONTH HIGH: | 305p | LOW: 200p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 100.2p | NET CASH: | £63.9m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 51.5 | 16.7 | 12.6 | 5.0 |
| 2015 | 45.7 | 11.9 | 8.3 | 5.5 |
| % change | -11 | -29 | -34 | +10 |
Ex-div: 21 May Payment: 26 Jun | ||||
