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Inflation and interest rates dampen second quarter for Numis
8th Feb 2022 09:11
(Sharecast News) - Numis said in a trading update on Tuesday that revenue for its first quarter was in line with the "strong" second half performance of the 2021 financial year.
The AIM-traded firm, which was holding its annual general meeting, said investment in its product capabilities underpinned investment banking revenues for the three months ended 31 December.
It said continued momentum in mergers and acquisitions and Growth Capital Solutions, its private markets business, largely offset a reduction in IPO revenues.
The equities business, meanwhile, delivered a "consistent performance", and the board said it was well-placed to benefit from any increase in market volatility.
"During the period we acted on our first US IPO, and continue to make progress toward establishing an EU presence through our Dublin office, which will enable us to target further revenue opportunities outside the UK," the board said in its statement.
"However, mounting inflation and interest rate concerns have impacted broader equity markets in recent weeks, with a reduction in investor risk appetite and capital markets activity."
As such, Numis said it had a slower start to its second quarter, although its pipeline and outlook for the second half across both mergers and acquisitions and capital markets was described as "encouraging", with the board confident in its outcome for the full year.
"Whilst market conditions will always influence our financial performance in the short term, we remain committed to our long-term strategy of building a broader, more diversified and resilient investment banking business."
At 1027 GMT, shares in Numis Corporation were down 4.04% at 285p.
The AIM-traded firm, which was holding its annual general meeting, said investment in its product capabilities underpinned investment banking revenues for the three months ended 31 December.
It said continued momentum in mergers and acquisitions and Growth Capital Solutions, its private markets business, largely offset a reduction in IPO revenues.
The equities business, meanwhile, delivered a "consistent performance", and the board said it was well-placed to benefit from any increase in market volatility.
"During the period we acted on our first US IPO, and continue to make progress toward establishing an EU presence through our Dublin office, which will enable us to target further revenue opportunities outside the UK," the board said in its statement.
"However, mounting inflation and interest rate concerns have impacted broader equity markets in recent weeks, with a reduction in investor risk appetite and capital markets activity."
As such, Numis said it had a slower start to its second quarter, although its pipeline and outlook for the second half across both mergers and acquisitions and capital markets was described as "encouraging", with the board confident in its outcome for the full year.
"Whilst market conditions will always influence our financial performance in the short term, we remain committed to our long-term strategy of building a broader, more diversified and resilient investment banking business."
At 1027 GMT, shares in Numis Corporation were down 4.04% at 285p.