Peel Hunt Limited · LSE:PEEL
Peel Hunt — FY2022 Earnings Presentation
34 slides from Peel Hunt's earnings presentation, Jun 9, 2022
Slide 1: Full year results presentation
9th June 2022 Full year results presentation For the year ended 31 March 2022
Slide 2: Agenda
Agenda 01 Overview & Highlights 02 Market Update 03 Business & Financials Update 04 Strategy & Outlook 05 Q&A 06 Appendices 2
Slide 3: Overview & Highlights
Section 1 Overview & Highlights 3
Slide 4: Overview & Highlights
Overview & Highlights Full year dividend of 3.1p per share in accordance with IPO dividend policy 1 £131.0m Overall: Resilient performance in challenging markets through diversified business model. Revenue 2 £41.2m Investment Banking: Most active UK ECM bank (46 equity fundraises), record results. P
Slide 5: Market Update
Section 2 Market Update 5
Slide 6: A volatile start to 2022
Market Update A volatile start to 2022 Commentary Volatility has spiked 40 on inflation and policy 35 expectations 30 25 20 VIX 15 Capital markets are volatile as investors get to Average 10 grips with economic and geopolitical risks. April 21 June 21 August 21 October 21 December 21 February 22 Apr
Slide 7: Business & Financial Update
Section 3 Business & Financial Update 7
Slide 8: Diversified business model demonstrates resilience across periods of high market volatility
Diversified business model demonstrates resilience across periods of high market volatility Retainers Transaction Research Sales Execution Recurring Revenue fees Commissions Services Our diversified business model demonstrated its Diversified Institutional Spread Annual Recurring value in periods of
Slide 9: Illustrative Consolidated Statement of Comprehensive Income
Illustrative Consolidated Statement of Comprehensive Income Change Illustrative P&L Analysis Bridge As at 31 March FY22 FY21 FY20 (FY22 v FY21) £57.9m (£65.9m) £m Investment Banking revenue 57.9 43.9 46.0 32.0% Research payments & execution £11.3m £25.5m 30.2 36.3 22.5 (16.6%) £29.5m (£7.5m) commiss
Slide 10: Revenue Overview
Revenue Overview Revenue by division Revenue Bridge £196.9m Change As at 31 March FY22 FY21 FY20 (FY22 v FY21) £12.9m £1.1m £131.0m (£6.1m) £m (£73.8m) Investment Banking fees 49.6 36.7 39.2 35.3% Investment Banking retainers 8.3 7.2 6.8 15.2% Research IB Payments & FY 2022 H1 2021 Execution Investm
Slide 11: Balance Sheet & Capital Position Overview
Balance Sheet & Capital Position Overview Commentary Cash Position £100.1m and Net Asset Value £103.4m £45.5m £48.4m Net assets remained strong as at 31 March 2022 at £100.1m reflecting the funds raised in the IPO. £42.3m £76.7m FY20 FY21 FY22 Cash Position Net Assets Cash has reduced mainly due to
Slide 12: Investment Banking Overview
Investment Banking Overview Commentary Investment Banking revenue £57.9m £46.1m £43.9m £8.3m £6.8m £7.2m £49.6m £39.3m £36.7m Investment Banking had its strongest year on record, with revenue of £57.9m, significantly ahead of FY20 & FY21. FY20 FY21 FY22 Fee Income Retainer Income Number of 170 £732m
Slide 13: Execution Services Overview
Execution Services Overview Commentary Execution FY20 FY21 FY22 Services Small-cap / AIM FTSE 350 £26.2m £116.8m £42.9m Corp. broking clients FY22 revenue was lower than the prior year, which had Fixed Income been buoyed by elevated volumes and volatility due to Investment Trusts the pandemic. Inter
Slide 14: Research and Distribution Overview
Research and Distribution Overview Commentary Research and Distribution £36.3m revenue £30.2m £22.5m Revenue of £30.2m, reflecting lower commission revenue from retail driven overseas equity execution compared to the exceptional volumes seen in the FY20 FY21 FY22 prior year. Number of companies unde
Slide 15: Operating Costs Overview
Operating Costs Overview Commentary Non-Staff costs (Actual) 60 160 140 50 £109.2k £109.9k 120 £99.8k 40 100 £2.9m Staff costs reduced YoY due to lower revenues driving 30 £3.4m 80 lower bonuses; the FY22 compensation ratio is in line 60 20 with our expected level. £34.0m 40 £28.0m £28.0m 10 20 Excl
Slide 16: Use of IPO Funds to deliver strategic priorities
Use of IPO Funds to deliver strategic priorities Expanding our offering Digital Strategy IPO funds deployed to enhance the business Investing in our technology European platform platform Good progress has been made towards opening platform in Execution Services - We are focused on our revenue genera
Slide 17: Technology key to our competitive advantage and future growth
Technology key to our competitive advantage and future growth Our People Our Information Our Customers Our Technology & partners Develop the digital Build a value driven Product leadership for savviness of our people Data & Analytics the Digital business Scalable operating capability Platform Work
Slide 18: ESG at Peel Hunt: Community, Diversity & Sustainability
ESG at Peel Hunt: Community, Diversity & Sustainability sustainability • We established a Social, Environmental, Ethical & Reputational (SEER) Committee, which looks in detail at potential clients through an ESG lens. • By the end of 2023, we will have finished mapping all our scope 3 emissions, and
Slide 19: Strategy & Outlook
Section 4 Strategy & Outlook 19
Slide 20: Strategy
Strategy Connecting all key participants through 4 key focus areas Corporates Corporate broking, Relationships capital raising and advisory Technology Relevance Institutions Retail Investors Research and Liquidity provision and distribution market making Long Term Business & Overview & Market Strate
Slide 21: Current trading and outlook
Current trading and outlook Current TradinG Outlook • Remains ahead of pre pandemic levels. • Strong position to benefit from ongoing changes in Execution Services retail investors’ behaviour. • Focus is on spread capture and return on funding. • Exploring access to other markets. • Commissions rema
Slide 22: Summary
Summary 1 £131.0m Overall: Solid performance demonstrating our diversified and resilient revenue model. Revenue 2 Strategic priorities: progress in our US distribution capability, establishing our platform in the EU and £41.2m in our digital strategy. Profit Before Tax 3 47.1% Investment Banking: Re
Slide 23: Q&A
Section 5 Q&A |23
Slide 24: Appendices
Section 6 Appendices 24
Slide 25: Unaudited Illustrative Financials
Unaudited Illustrative Financials 25
Slide 26: Unaudited Illustrative Consolidated Income Statement
Unaudited Illustrative Consolidated Income Statement The unaudited illustrative consolidated income statement set out below has been prepared to illustrate the impact that the reorganisation of the Group’s corporate structure, and the IPO, would have had on the consolidated statement of comprehensiv
Slide 27: FY22 Illustrative Financials
FY22 Illustrative Financials Moving from a partnership to public shareholder structure Pre-IPO Group Adjustments Illustrative Post-IPO Group As at 31 March FY22 FY21 As at 31 March FY22 FY21 1 Administrative costs: Year Year ended £’000 ended • All LLP partners convert to employees £’000 £’000 Year
Slide 28: FY22 Illustrative Group Profit Reconciliation
FY22 Illustrative Group Profit Reconciliation Administrative Expenses1 Include: Revised Exclude: Tax Include: Additional Actual Financials- Exclude: One-off Include: Illustrative Illustrative - Group compensation charges in respect of Corporation tax incl. Group (Consol) expenses2 40% dividend (Cons
Slide 29: Audited Financial Statements
Audited Financial Statements 29
Slide 30: Consolidated Income Statement
Consolidated Income Statement Audited for the year ended 31 March 2022 Income statement FY22 FY21 Change £’000 31 Mar 22 31 Mar 21 Research payments & Execution 30,241 36,258 (16.6%) commission Execution Services Revenue 42,857 116,706 (63.3%) Investment Banking fees and retainers 57,948 43,910 32.0
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet Audited for the year ended 31 March 2022 Balance Sheet FY22 FY21 Change £’000 31 Mar 22 31 Mar 21 Non-current assets 27,929 30,855 (9.4%) Long positions of dealing operations 50,341 47,296 6.4% Market and client debtors 559,485 531,178 5.3% Other debtors 13,200 9,139 44.4%
Slide 32: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows Audited for the year ended 31 March 2022 Cash Flow FY22 FY21 Change £’000 31 Mar 22 31 Mar 21 Net cash generated from operations (68,022) 84,580 (180.4%) Cash flows from investment activities Purchase of tangible assets (1,345) (9,444) (85.8%) Purchase of intangi
Slide 33: Peel Hunt Limited Capital Position
Peel Hunt Limited Capital Position Audited for the year ended 31 March 2022 Pillar 1 Capital Position(1)(2) FY 2022 FY 2021 Change £’000 31 Mar 22 31 Mar 21 Total own funds 100,146 48,370 107.04% MIFIDPRU [from 1st January 2022] Risk-to-Market 16,304 Risk-to-Firm 1,293 Risk-to-Client 360 CRD IV Mark
Slide 34: Disclaimer
Broker Nominated Advisor Disclaimer Certain statements included or incorporated by reference within Keefe, Bruyette & Woods Grant Thornton UK LLP this presentation may constitute “forward-looking statements” in respect of the group’s operations, performance, prospects and/or 150 Cheapside, 4th Floor