Peel Hunt said profits had plunged by 99 per cent in the first half of the year as it is hammered by a slump in initial public offerings and volatility on the markets.
In its half year results today, the firm reported pre-tax profits of just £0.1m, down from £29.5m last year, after revenue tumbled to £41.1m from £71.4m in the same period last year.
Peel Hunt’s assets fell to £95.9m from £100.1m in the same period as cash levels plunged by nearly half to £41.4m.
Peel Hunt chief Steven Fine said “challenging market conditions” continued to have an “adverse impact on markets and investor sentiment”.
“Equity capital markets activity has been at a multi-decade low and market volumes have reduced materially during this period,” he said.
“This is due to several factors including investor redemptions, institutional investors building up cash positions and retail investors being more cautious as equity markets responded to rising inflation, the cost-of-living crisis and the possibility of a lengthy UK recession.”
The figures underscore the torrid period on London’s capital markets this year as the City’s brokers and bankers suffer a sharp slowdown in fees after a bumper year in 2021.
Cash raised through initial public offerings in London plunged by more than seven times in the third quarter of the year as the Capital continues its barren run amid soaring inflation and market volatility.
The firm said it had increased the “size and quality” of its corporate client base however, with 13 new corporate clients, including four in the FTSE 350.
Eight firms raised just £565.5m in total in the third quarter amid a wider global slump which has seen a 44 per cent slump in terms of the number of IPOs and a 57 fall in terms of proceeds compared to the same period in 2021.
Investors took fright at the results today as shares tumbled by around six per cent.