CITY broker Numis kept its head above water in the increasingly crowded broking market last year after a multi million pound boost from its investments portfolio, it said yesterday.
The brokerage, which helps raise money from the markets for small businesses, saw revenues dip after a 15 per cent drop in institutional commission and trading revenues.
This led to a plunge in pre-tax profits down to £7.7m.
But an increase in money from the other companies that Numis invests in over the year, meant its investment portfolio saw gains of nearly £2m. Together with £900,000 of dividend receipts, this helped shore up the balance sheet. It delivered a bottom line profit of £4.1m.
“Revenue is down a small amount but that’s in the context of much lower volumes. There’s still too much capacity in the market,” Numis chief executive Oliver Hemsley told City A.M. “There’s a lack of confidence out there and a lot of that is borne out with what we’re seeing.”
Low trading volumes have meant City brokerages have struggled to maintain consistent profits over the last year.
Yesterday, Numis reported it had raised £717m in the market for clients over the year, up from £634m in the year previously.
Hemsley said: “The banks have been omnipotent in the lending markets and companies need to diversify their sources of finance. It’s dangerous to have all funding from one organisation.”