Peel Hunt Limited · LSE:PEEL
Peel Hunt — H1 FY24 Earnings Presentation
24 slides from Peel Hunt's earnings presentation, Dec 5, 2023
Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION For the period ended 30 September 2023 5TH DECEMBER 2023
Slide 2: Agenda
Agenda Presenters 01 Overview & Highlights Steven Fine Chief Executive Officer 02 Market Update 03 Business & Financials Update Sunil Dhall Chief Financial & Operating Officer 04 Strategy & Outlook 05 Q&A 06 Appendices 2
Slide 3: Overview and Highlights
~ OVERVIEW AND HIGHLIGHTS
Slide 4: Overview
Overview Strategic progress despite the challenging market backdrop Financial Highlights £42.7m £(0.7m) 58.6% £92.8m £22.6m Revenue Loss After Tax Compensation Ratio Net Asset Value (NAV) Cash Balance • Corporate clients Added 9 new mid-cap & growth companies Investment Banking • Diversification str
Slide 5: Key messages
Key messages Results impacted by market conditions but well positioned for growth due to operational leverage when markets normalise Market Recovery? Despite the continued challenging • UK-focused equity funds continued to experience net outflows. Towards the end of the market backdrop, our performa
Slide 6: Market Update
MARKET UPDATE
Slide 7: UK Equity market backdrop
UK Equity market backdrop Volatile backdrop to 2023, with mid-cap valuations attractive to bidders UK Mid Cap underperformance Market volatility has diminished Macroeconomics 110 45 Tightening cycle coming to an end 105 40 Interest rates likely higher for 100 35 longer, with the potential to red
Slide 8: Capital raising activity
Capital raising activity The market has been subdued since the boom in 2021 – but cautiously optimistic for a return in 2024 Recent UK IPO activity 9 Post-Covid-19 8 7 6 Deal Value (£bn) 5 4 3 2 1 0 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023
Slide 9: Peel Hunt - Leading mid-market M&A advisers
Peel Hunt - Leading mid-market M&A advisers Highly active M&A practice, specialist in UK plc takeovers Most active in UK plc M&A 20231 Rank Adviser # of transactions 1 Rothschild 11 2 Deutsche Numis 10 3 4 Peel Hunt Investec 7 6 c.£430m = finnCap 6 Average transaction size since 20192 = Liberum 6 5
Slide 10: Business and Financials Update
BUSINESS AND FINANCIALS UPDATE
Slide 11: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income Consolidated Statement of Comprehensive Income Headlines H1 FY24 H1 FY23 £m % change YOY £'000 £'000 Investment Banking revenue 17,340 11,866 46.1% • Overall deal activity has remained subdued, though revenues in Investment Banking were Research payment
Slide 12: Balance Sheet & Capital Position Overview
Balance Sheet & Capital Position Overview Commentary Cash Position and Net Asset Value £95.9m £92.8m £93.1m The Group’s net asset position as at 30 September 2023 was £92.8m, a decrease of 0.3% compared to 31 March 2023 £41.4m £27.4m £22.6m Maintained a good cash balance at the period end of £22.6m
Slide 13: Investment Banking Overview
Investment Banking Overview Commentary Investment Banking revenue + 14% £33.7m Average retainer Fee income continues to be impacted £3.9m +14% since H1 22 by low volumes of activity, especially in £17.3m equity issuance. However, higher M&A £11.9m fees have resulted in fee income £28.8m £4.4m £4.4m
Slide 14: Investment Banking - Total market cap of clients
Investment Banking -Total market cap of clients Peel Hunt punches above its weight in terms of total market cap of corporate clients Total Market Cap of • A lack of capital market activity has resulted Rank Stockbroker Stock Market Clients Total Number of Stock Market Cap of Bank Market Clients (Aug
Slide 15: Execution Services Overview
Execution Services Overview Commentary Execution Services revenue breakdown H1 23 H2 23 H1 24 H1 FY24 revenue was lower than the prior Small-cap / AIM year, due to reduced trading volumes FTSE 350 ETF/ Others £17.4m £14.8m £16.4m Fixed Income Our Small-cap and AIM desk have Investment Trusts perform
Slide 16: Research & Distribution Overview
Research & Distribution Overview Commentary Research and Distribution revenue £13.3m Market volumes in H1 FY24 reduced in £11.8m £10.5m comparison to H1 FY23, due to lower institutional investor sentiment relating to interest rates and inflationary concerns weighing on risk assets, including equitie
Slide 17: Operating Costs Overview
Operating Costs Overview Commentary Cost Overview 140 220 Staff and non-staff costs per FTE increased, 120 £156k £161k £151k 170 mostly due to inflationary pressures faced by 100 £115k £115k the Group and targeted salary increases £102k 80 120 60 £40.2m £42.2m 70 £42.9m We completed hires into our C
Slide 18: Strategy and Outlook
_ STRATEGY AND OUTLOOK
Slide 19: Embedding Technology in everything we do
Embedding Technology in everything we do Strategic Progress Peel Hunt AI Solutions Utilising technology to enhance MI • Research Assistant: Unique AI system • New Dashboards created that combines both qualitative and to combine multiple sets of quantitative data data to give a comprehensive overview
Slide 20: Current trading and outlook
Current trading and outlook HY Peel Hunt well placed to weather the difficult markets and take advantage when activity increases Current Trading Outlook • Volumes: lower market volumes but revenues above pre- • We continue to focus on adding incremental liquidity covid levels and driving efficiencie
Slide 21: Q&A
Q&A
Slide 22: Appendices
APPENDICES
Slide 23: Consolidated Balance Sheet HY
Consolidated Balance Sheet HY Unaudited as at 30 September 2023 FY24 FY23 Change FY24 FY23 Change £’000 30 Sep 23 30 Sep 22 £’000 30 Sep 23 30 Sep 22 Non-current assets 24,874 27,116 (8.3%) EQUITY Securities held for trading 62,772 55,180 13.8% Ordinary Share Capital 40,099 40,099 - Market and clien
Slide 24: Disclaimer/Risk Warning
Disclaimer/Risk Warning Broker Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the group’s operations, performance, prospects and/or financial condition. Keefe, Bruyette & Woods 150 Cheapside, 4th Floor By th