Management at Numis (NUM) blamed cyclicality and a “significant slowdown in UK deal activity”, along with investor cautiousness, for a disappointing start to the year. The group's capital markets segment registered a 24.7 per cent decrease in revenue at the half-year mark, while institutional income from equity markets fell back by 11 per cent. The latter business was always likely to struggle given the decline in UK equity volumes, but it also had to bear the loss associated with the underwriting of the Kier rights issue. All this fed through to a 57.9 per cent fall in adjusted operating profit.
Management highlighted an increase in the number of FTSE 350 constituents that Numis serves, but that's cold comfort while deal activity and volumes remain suppressed. It also cited a 17.3 per cent increase in the aggregate market cap of its clients, though given this is essentially a function of the market, it's a largely meaningless metric – 'clutching at straws' as it were.
More encouragingly, Numis managed to keep average deal fees at broadly the same level as last year, providing something of a bulwark in challenging markets – and challenging they are. Post period-end, Numis has seen lower-value capital markets transactions and equity revenues staying broadly level. The group has seen an “encouraging” increase in its pipeline of merger activity and is working on some “meaningful” capital-raising opportunities.
| NUMIS CORPORATION (NUM) | ||||
| ORD PRICE: | 259p | MARKET VALUE: | £ 275m | |
| TOUCH: | 259-262p | 12-MONTH HIGH: | 449p | LOW: 222p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 132p | NET CASH: | £78.9m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 74.1 | 19.5 | 15.8 | 5.50 |
| 2019 | 55.7 | 7.1 | 5.4 | 5.50 |
| % change | -25 | -64 | -66 | - |
| Ex-div: | 16 May | |||
| Payment: | 21 Jun | |||
