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Peel Hunt (LSE:PEEL), a prominent UK investment bank, has released a trading update for the first half of fiscal year 2025, covering the six-month period ending September 30, 2024. The company reported a strong financial performance, with group revenues touching £53.3 million, up by 25% compared to £42.7 million in the same period the previous year. This growth is attributed to an improved macroeconomic environment and successful execution of mergers and acquisitions (M&A) financial advisory mandates during the period.
In the Investment Banking division, Peel Hunt experienced better performance in its core equity capital markets (ECM) business, particularly in the first quarter of FY25. The firm played key roles in major transactions, acting as joint global coordinator for a Main Market initial public offering (IPO) and as nominated adviser and sole bookrunner for an AIM IPO. While overall ECM activity remained subdued in the market, Peel Hunt managed to assist several clients with equity fundraises and block trades. Notably, M&A advisory fees formed a larger portion of the division’s revenues, supported by a significant deal announced at the end of FY24 and completed in the first half of FY25.
The Research & Distribution segment also saw modest revenue growth compared to the previous year. Despite ongoing outflows from UK equities, Peel Hunt continued to enhance its capabilities, particularly in merger arbitrage and low-touch electronic trading, which helped sustain the business's performance. Additionally, trading volumes in Execution Services increased during the first four months of FY25, although activity has slowed more recently due to market uncertainty surrounding the upcoming UK Budget and US election.
Peel Hunt made significant strategic progress during the period, with continued investment in talent aligned with its priorities. The company capitalized on market disruption and consolidation among competitors, making senior hires in its Investment Banking team across key sectors such as Financials, Consumer, Industrials, and Technology, Media & Telecoms. Additionally, Peel Hunt bolstered its European distribution platform, further strengthening its position as a stable and resilient independent investment bank.
The company also reported an increase in corporate client wins and organic growth among existing clients, resulting in several promotions to key market indices. Peel Hunt now serves 4 FTSE 100 companies and 42 FTSE 250 companies. The average market capitalization of its retained corporate clients has grown by 38% year-on-year, rising from approximately £620 million to £860 million, while the total market capitalization of these clients increased by 29% to £124 billion. Peel Hunt’s focus on distribution, advice, and market share has extended its reach as a trusted investment banking partner for listed companies across various market capitalizations.
Looking ahead, Peel Hunt noted a recent slowdown in market activity due to uncertainty surrounding the upcoming UK Budget and US election. Despite this, the company expects its full-year performance to align with market expectations.
