In an environment where brokers have struggled under the weight of declining corporate retainers and trading commission, Numis (NUM) is more than holding its own. That’s thanks to the rapidly expanding corporate broking and advisory business, which grew revenues by more than three-quarters to £51m during the first half of the year.
The uplift in capital markets and advisory revenue was the result of a rise in average deal fees rather than transaction volumes, which were broadly flat. The market capitalisation of its clients now averages around £711m, up on £637m the same time the previous year. Capital markets income almost doubled, with the group undertaking five IPOs, including that of Sabre Insurance (SBRE), and equity-raises including $546m for Catco Reinsurance.
A rise in mergers and acquisitions (M&A) advisory mandates from existing clients also drove an 86 per cent increase in advisory income. Management expects M&A activity to increase through 2018, a view given credence by recent analysis from Dealogic. That’s one of the reasons why Numis has been expanding its staff numbers, which were up almost a fifth. However, equities income was down marginally on the prior year at £23m, as heightened market volatility in the second quarter dissuaded institutions from trading.
| NUMIS CORPORATION (NUM) | ||||
| ORD PRICE: | 407p | MARKET VALUE: | £ 436m | |
| TOUCH: | 403-408p | 12-MONTH HIGH: | 420p | LOW: 231p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 131p | NET CASH: | £83m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 52.4 | 10.5 | 8.0 | 5.5 |
| 2018 | 74.1 | 19.5 | 15.8 | 5.5 |
| % change | +41 | +86 | +98 | |
| Ex-div: | 17 May | |||
| Payment: | 22 Jun |
