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Broker Numis withstanding industry pressures

The broker is taking on more advisory roles and growing its client list
December 9, 2016

The IPO market was relatively subdued in the reported period, as political uncertainty encouraged a cautious attitude. But Numis (NUM) still managed to put in a solid performance - in fact, the period saw the highest level of turnover in the broker's history. The group continues to take on more corporate advisory work, a more reliable source of sales, with revenue from IPO transactions only accounting for about 15 per cent of its total.

IC TIP: Buy at 232p

The corporate broking and advisory business added 16 new clients, on a net basis, taking the total amount of companies it acts for to 199. While the amount of new equity capital it raised declined from £2.1bn to £1.8bn, Numis has increased its market share. It raised 8 per cent of the total equity raised during the year, up from 6.9 per cent the previous year. Advisory roles included work on Trinity Mirror’s (TNI) acquisition of Local World and the disposal of UTV Television to ITV (ITV). This helped boost advisory revenue by 14 per cent to £74m. Combined institutional commission and trading revenues grew by a similar amount, although this type of income is less predictable.

The group carried out more work advising on private placements - fundraising by private companies - which newly-appointed co-CEOs Alex Ham and Ross Mitchinson say are becoming more popular with companies not yet ready to come to the public market. In January it took part in a £128m private placement in Skyscanner.

NUMIS CORPORATION (NUM)

ORD PRICE:232pMARKET VALUE:£263m
TOUCH:232-234p12-MONTH HIGH:273pLOW: 175p
DIVIDEND YIELD:5.2%PE RATIO:10
NET ASSET VALUE:114pNET CASH:£89m

Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2012504.23.28
20137822.616.99
20149324.418.710.5
20159821.519.511.5
201611226.423.512
% change+15+23+21+4

Ex-div: 15 Dec

Payment: 10 Feb