Peel Hunt says revenues will tumble to £40.5m as capital market slump continues

Investment bank Peel Hunt said it expects revenues to tumble to £40.5m in the first six months of the year as its bottom line is hammered by a major slowdown in capital markets activity.

In a trading update this morning, the bank said it had made “significant progress” on its strategic priorities but was continuing to feel the squeeze of “historically low levels of capital markets activity”.

Group revenues for the period are expected to fall to approximately £40.5m. It comes after revenues for the year to March fell from £197m to £131m, and profits came in at £120m to £41m, as the dealmaking slowdown took hold.

Peel Hunt said it had managed to offset many of its client losses by building out both its advisory and private capital markets capabilities.

“During the period we added 11 new retained corporate clients (including 4 in the FTSE 350), more than offsetting client losses in the period (including those resulting from M&A),” the firm said in a statement.

“We now have a retained corporate client base of 164 companies with an average market capitalisation of approximately £600m and spanning 10 per cent of the FTSE 350.”

Peel Hunt has been rocked by a drop off in IPOs this year as firms and investors shun the capital markets amid extreme volatility, sparked by soaring inflation and war in Ukraine.

The total proceeds of IPOs in London plunged 94 per cent in the first half of the year as 26 firms raised a total of £595m, a sharp slump from 47 issuers raising £9.4bn in the same period in 2021, according to data from big four firm EY.