Numis, the ‘mini-investment bank’ set to be bought by Deutsche Bank, says there are “emerging indications” that market activity will pick up over next six months, after its profits fell by 55% in the past half-year.
Revenue slid by 14%, which the City firm put down to “subdued” market activity. However, the company’s advisory arm performed much better, with revenue up 40%.
While performance in recent months has been disappointing, Numis expects a turnaround. After warning last month that there was “unlikely to be a meaningful change in market conditions”, the firm is now starting to see green shoots.
“We have started to see emerging indications that the second half may see relatively better conditions,” co-CEOs Alex Ham and Ross Mitchinson said. “Irrespective of the market environment, the financial position of the Group remains resilient and our capital position strong."
The positive comments come as fellow City firm Peel Hunt today released new analysis highlighting early signs of accelerating UK takeover activity through April, especially in private equity.
On the same day that Numis had warned it wasn’t seeing a turnaround, Peel Hunt said that capital markets activity is at “historic lows”.
According to the firm, 29 companies were under offer at the end of the month, of which 14 were recommended firm offers with an average offer value of £529.8m Among the most notable activity was Apollo Global’s efforts to buy engineer John Wood Group and payments provider Network International receiving bids from multiple buyout firms.
Despite the slowdown, Numis maintained its dividend at 6p per share.
German titan Deutsche Bank is set to buy Numis for £410 million, in order to get closer to top London firms. The deal is set to close in the final quarter of the year.
Given the impending 350p-a-share takeover, there was little movement in Numis’ stock price, which remained around 340p. Peel Hunt shares are up 1p to 120p.
