TIDMNUM
RNS Number : 4918Y
Numis Corporation PLC
05 May 2023
2023 Interim Results
5 May 2023 : Numis Corporation Plc (Numis) today announces
unaudited interim results for the period ended 31 March 2023.
Alex Ham and Ross Mitchinson, Co-Chief Executive Officers at
Numis, said:
"We are pleased that our business continues to perform
resiliently despite the persistence of the unfavourable market
conditions that have been a feature of the investment banking
sector for the past 12 months or so. Diversification has been the
foundation of our comparative resilience throughout this down cycle
and this has been demonstrated by record revenues in our advisory
business. This diversity also allows for us to maintain a focus on
total shareholder returns through cycles with the interim dividend
maintained at 6.0p per share."
"Whilst capital markets volumes are likely to remain relatively
low over the near term, we have started to see emerging indications
that the second half may see relatively better conditions.
Irrespective of the market environment, the financial position of
the Group remains resilient and our capital position strong. "
Financial Highlights
-- Revenue of GBP63.8m, down 14% compared to prior period as market activity remained subdued
-- Profit Before Tax (PBT) of GBP6.0m, down 55%, due to the operational gearing in the business
-- Investment banking revenues declined 12% as low capital
markets activity was partially offset by record performance in our
advisory business
o Advisory revenues up 40% year-on-year, with average fees up
204% compared to H1 FY22 and we are starting to build a broader
pipeline of M&A transactions
o Capital markets revenues down 52% as UK ECM volumes dropped to
a 10-year low
-- Equities revenues down 17% as weak Q2 trading performance offset market share gains
-- Resilient shareholder returns; interim dividend of 6.0p
consistent with the prior year, and a further GBP4.4m spent on
share repurchases
-- Balance sheet position remains robust; strong liquidity and
capital positions maintained despite prolonged period of
unfavourable conditions
Strategic Highlights
-- On 28 April the Board of Numis and the Management Board of
Deutsche Bank AG announced that they have reached agreement on the
terms of a recommended all-cash offer by Deutsche Bank AG for the
entire issued and to be issued share capital of Numis. Further
details relating to the timetable of the Offer will be announced in
due course.
Outlook
General macro-economic sentiment continues to weigh on the
outlook for the investment banking industry. Against that backdrop,
our advisory business continues to perform well and has good
pipeline of both buy-side and sell-side mandates for a range of
clients reflecting our growing reputation in M&A and our
progress in creating a proposition that delivers through market
cyclicality. Capital markets volumes are likely to remain
relatively low. However, there are some emerging indications that
the historic lows we have recently experienced may give way to
better conditions in the second half.
Key statistics
Financial highlights H1 2023 H1 2022 Change
============================= ========== ========== ===========
Revenue GBP63.8m GBP74.2m (14)%
Underlying operating profit GBP5.6m GBP14.0m (60)%
Profit before tax GBP6.0m GBP13.4m (55)%
Diluted EPS 4.3p 14.6p (71)%
Cash GBP99.7m GBP111.5m (11)%
Net assets GBP179.6m GBP190.8m (6)%
Operating highlights
============================= ========== ========== ===========
Corporate clients 166 183 (9)%
Average market cap of
clients GBP1.0bn GBP1.2bn (18)%
Revenue per head GBP381k GBP457k (17)%
Operating margin 8.8% 18.9% (10.1)ppts
Spend on share repurchases GBP4.4m GBP6.5m (33)%
============================= ========== ========== ===========
Note: Revenue, underlying operating profit, operating margin and
revenue per head all exclude investment gains and losses.
Contacts
Numis:
Noreen Biddle-Shah, Head of Communications 020 7260 1441
FTI Consulting LLP:
Edward Bridges 07768 216607
Daisy Hall 07807 298568
Grant Thornton UK LLP (Nominated Adviser):
Philip Secrett 020 7728 2578
Harrison Clarke 020 7184 4384
Notes for editors
Numis (LON: NUM) is an international investment bank that
partners with some of the most ambitious companies and investors,
offering strategic advice, unique insights and connectivity to the
capital markets.
Already a leader in the UK market, Numis is the adviser of
choice for many listed companies, including one-fifth of the FTSE
350 index ([1]) , with an average market capitalisation of GBP1.0bn
([2]) , and has acted on the most UK IPOs over the past decade.
Since 2016, Numis has diversified its strategy to grow its UK
M&A franchise, expand internationally and develop its private
markets business, which combined now represent more than half of
Numis' investment banking revenues ([3]) .
Numis is listed on London's AIM and has offices in London, New
York and Dublin.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it
forms part of domestic law of the United Kingdom by virtue of the
European Union (Withdrawal) Act 2018).
Forward-looking statements
This announcement contains forward-looking statements.
Forward-looking statements sometimes use words such as 'may',
'will', 'could', 'seek', 'continue', 'aim', 'anticipate', 'target',
'project', 'expect', 'estimate', 'intend', 'plan', 'goal',
'believe', 'achieve' or other words of similar meaning. Past
performance is no guide to future performance and any
forward-looking statements and forecasts are based on current
expectations and assumptions but relate to events and depend upon
circumstances in the future and you should not place reliance on
them. These statements and forecasts are subject to various risks
and uncertainties and there are a number of factors that could
cause actual results or developments to differ materially from
those expressed or implied by forward-looking statements and
forecasts.
The forward-looking statements contained in this document speak
only as of the date of this announcement and (except as required by
applicable regulations or by law) Numis does not undertake to
publicly update or review any forward-looking statements, whether
as a result of new information, future events or otherwise.
Nothing in this announcement constitutes or should be construed
as constituting a profit forecast.
No offer of securities
The information, statements and opinions contained in this
announcement do not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation, or
an offer, or solicitation of an offer, to buy or sell any
securities or financial instruments in any jurisdiction, or any
advice or recommendation with respect to any securities or
financial instruments.
Business review
The first half of our financial year has seen a continuation of
the unfavourable market backdrop and, in the case of capital
markets, we have experienced a deterioration in deal volumes
relative to the comparative period. Consequently, our revenues for
the half decreased 14% to GBP63.8m (2022: GBP74.2m) and Underlying
operating profit decreased 60% to GBP5.6m (2022: GBP14.0m). Profit
before tax was GBP6.0m (2022: GBP13.4m) and included GBP0.5m of
gains recognised on investments held outside of our market making
business (2022: GBP0.4m gain). Our net assets decreased 6% over the
period to GBP179.6m, and similarly our liquidity position was
marginally lower but remains strong; cash balances were GBP99.7m
(2022: GBP111.5m).
Market conditions
Throughout the first half equity markets remained fragile.
Inflation concerns and rising interest rates remained firmly in
focus for both our institutional and corporate clients. Investor
sentiment toward the UK generally remained weak with domestic
focused institutional investors experiencing persistent fund
outflows. Despite the challenging backdrop, UK markets optically
performed relatively well with the FTSE 100 and FTSE 250 up 11% and
10% respectively.
However, the improved performance of UK indices was not matched
by a corresponding increase in ECM activity. UK ECM volumes
remained at 10 year lows, declining 62% against a weak comparative
period. The IPO market remains effectively closed although there
are some early indications of potential recovery in activity toward
the end of 2023. Private markets have also been impacted by the
broader slowdown in capital markets; however, there remains a
significant amount of dry powder among venture and growth equity
investors globally.
Whilst M&A volumes also declined across the period, activity
levels have been generally more resilient compared to capital
markets, particularly in the UK mid-market where valuations of
listed companies remain attractive notwithstanding some recovery in
market levels.
Investment banking
H1 2023 H1 2022 %
GBPm GBPm change
============================ ======= ======= =======
Capital markets 11.9 24.7 (52)%
Advisory 24.2 17.2 40%
Corporate retainers 6.1 6.1 0.0%
Investment banking revenue 42.2 48.0 (12)%
============================ ======= ======= =======
The investment banking division delivered revenue of GBP42.2m
(2022: GBP48.0m) for the first half, representing a decline of 12%
relative to H1 FY22 which benefitted from the tail end of the
post-COVID recovery.
During the first half we continued to build on the successful
diversification of our investment banking business, delivering a
record first half advisory revenue performance. M&A revenues
have benefited from continued momentum in securing financial
adviser mandates from our corporate broking client base. The
strength of our offering has been demonstrated by further progress
in growing our average M&A deal fee. Average M&A fees were
up 204% compared to H1 FY22 and we are starting to build a broader
pipeline of M&A transactions beyond bid defence for our
corporate broking clients.
The strong advisory performance was offset by a weaker capital
markets performance where revenues were down more than 50%. Whilst
our ECM market share in the UK has increased relative to the
comparative period, overall market levels of issuance declined
further during the half. For example, the first half of FY23
featured no IPOs whereas we completed 4 IPOs in the comparative
period last year.
Growth capital solutions, our private markets business, has
experienced a pick-up in deal activity and pipeline development.
Whilst revenues were lower than the first half of FY22, the
performance represented an improvement on the subdued H2 FY22
performance. Our track record in this structural growth market
leaves us well positioned to capitalise on a further recovery in
activity.
Our International ECM strategy continues to advance. We are now
distributing UK deals to EU institutional clients across both
public and private markets, and we have completed ECM transactions
for EU issuers in the period.
The decline in corporate clients to 166 was attributable to
elevated levels of mid-market takeovers. During the half, 9 clients
were lost due to transactions which more than offset the wins in
the period. Retainer fee income stayed consistent at GBP6.1m (2022:
GBP6.1m).
Growing the corporate client list is a strategic priority. We
will remain disciplined, and focused on those opportunities where
we can leverage the combined strength of our investment banking and
equities platforms. Whilst activity levels amongst our corporate
client base , across all products, was near the lower end of our
long-term historic range, corporate clients generated 88% of
investment banking deal fee revenues in the period demonstrating
the embedded value of the franchise.
Equities
H1 2023 H1 2022 %
GBPm GBPm change
====================== ======= ======= =======
Institutional income 17.4 19.6 (11)%
Trading 4.2 6.5 (36)%
Equities revenue 21.6 26.1 (17)%
====================== ======= ======= =======
Equities delivered revenue of GBP21.6m for the first half,
representing a decline of 17% relative to the comparative period.
Following a good start to the year, revenues were impacted by a
materially weaker trading performance in the second quarter which
led to a 36% decline in trading gains for the first half.
Institutional income was down 11% compared to H1 FY22 and in
line with the second half of FY22. The research payment component
of this revenue line remains consistent with prior periods
demonstrating the continued strength of our research offering and
stability of our institutional relationships.
Whilst investor sentiment remained cautious we continued to
offer high levels of service and proactive engagement to our
institutional clients. We expanded our European client base during
the period, in line with the strategy to enhance our distribution
capability beyond the UK and support our EU ECM marketing
efforts.
Investment portfolio
Overall, the portfolio achieved a gain of GBP0.5m and is now
valued at GBP17.7m representing approximately 10% of group net
assets. The portfolio faced valuation headwinds as the higher
interest rate environment led to continued pressure on the ratings
of listed growth businesses. In addition the weakening of the US
Dollar over the period adversely impacted valuations. As a result,
the majority of the holdings incurred write downs during the half.
However, the aggregate write down was more than offset by the
upward re-valuation of Wiz following completion of their funding
round in February 2023. This transaction was led by our growth
capital solutions team and demonstrates the strategic benefit of
aligning our investment portfolio with our private markets
activities.
Administrative expenses
H1 2023 H1 2022 %
GBPm GBPm change
============================ ======= ======= =======
Staff costs 33.3 36.0 (8)%
Share-based payments 3.2 3.0 6%
Non-staff costs 21.7 21.1 3%
Total administrative costs 58.2 60.1 (3)%
Half-Year headcount 338 325 4%
Average headcount 335 324 3%
Compensation ratio 57.2% 52.6% 4.6ppts
============================ ======= ======= =======
Total costs for the period reduced by 3% to GBP58.2m (2022:
GBP60.1m) due to lower variable compensation reflecting the lower
operating performance in the period. During the first half we made
a small number of headcount reductions in certain areas of the
business whilst maintaining our focus on investing in strategic
growth areas. Post the period end we also closed our Electronic
Trading business reflecting our assessment that this product was
not core to our long term strategy.
Our share based payment charge increased 6% due to a slightly
higher equity component to the prior year variable compensation
round. The compensation ratio increased as a function of the lower
revenue performance but remains well within our through the cycle
target range. New regulations governing the remuneration of certain
senior staff came into effect on 1 January requiring a greater
proportion of variable compensation to be delivered in the form of
equity.
Non-staff costs increased 3% due to higher technology and market
data costs as well as investment in our international strategy.
Capital and liquidity
The financial position of the Group remains extremely resilient
notwithstanding the prolonged weakness in capital markets activity.
We continue to operate significantly in excess of our regulatory
capital and liquidity requirements with sufficient capacity to
support our long term shareholder return strategy. During such
periods of market uncertainty, our balance sheet position enables
sustained investment in the platform as well as providing
reassurance and stability to our clients and employees.
The business has operated IFPR since 1 January 2022 and we
remain in a transition period, whereby our overall capital
requirement will remain consistent with the previous regime until
the FCA completes its review of our internal assessment.
Our liquidity position remains robust with cash balances of
GBP99.7m, 11% lower than the position at the end of FY22. The
decline was attributable to variable compensation payments related
to the prior year, which were partially offset by short-term cash
movements associated with trading and settlement activities.
Dividends and shareholder returns
In accordance with the dividend policy the Board has declared an
interim dividend of 6.0p per share. The dividend will be paid on 23
June 2023 to shareholders on the register on 19 May 2023.
The share count remains broadly in line with the comparative
period end pursuant to our strategy to offset the dilutive impact
of share awards though buybacks. During the half, on-market
purchases of shares totalling GBP2.6m have been executed. This is
supplemented by tax offset purchases by the EBT upon the vesting of
share awards which totalled GBP1.8m during the period.
On this occasion, the Company will not be offering shareholders
the option to participate in the dividend reinvestment plan
("DRIP").
Current trading and outlook
Whilst capital markets volumes are likely to remain relatively
low over the near term, we have started to see emerging indications
that the second half will see relatively better conditions.
Irrespective of the market environment, the financial position of
the Group remains resilient and our capital position strong.
Consolidated income statement
Unaudited for the 6 months ended 31 March 2023
6 months ended 6 months ended Year ended
31 March 2023 31 March 2022 30 September 2022
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
============================ ==== ============== ============== ==================
Revenue 3 63,788 74,153 144,229
Other operating income/loss 4 543 442 (1,432)
============================ ==== ============== ============== ==================
Total income 64,331 74,595 142,797
Administrative expenses 5 (58,205) (60,146) (123,716)
============================ ==== ============== ============== ==================
Operating profit 6,126 14,449 19,081
Finance income 6 2,047 8 3,906
Finance costs 6 (2,157) (1,032) (2,131)
============================ ==== ============== ============== ==================
Profit before tax 6,016 13,425 20,856
Taxation (1,118) 3,357 (7,153)
============================ ==== ============== ============== ==================
Profit for the period 4,898 16,782 13,703
============================ ==== ============== ============== ==================
Attributable to:
Owners of the parent 4,898 16,782 13,703
============================ ==== ============== ============== ==================
Earnings per share
Basic 7 4.5p 15.1p 12.4p
Diluted 7 4.3p 14.6p 11.9p
Consolidated statement of comprehensive income
Unaudited for the 6 months ended 31 March 2023
Year ended
6 months ended 6 months ended 30 September
31 March 2023 31 March 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
======================================== ============== ============== =============
Profit for the period 4,898 16,782 13,703
Items that may be reclassified to
the Income Statement on fulfilment
of specific conditions:
Exchange differences on translation
of foreign operations (1,227) 85 1,051
Items that will not be reclassified
to the Income Statement:
Excess of tax deduction over cumulative
share scheme charges 5,058
Other comprehensive income for
the period, net of tax (1,227) 85 6,109
Total comprehensive income for the
period, net of tax, attributable
to owners of the parent 3,671 16,867 19,812
======================================== ============== ============== =============
Consolidated balance sheet
Unaudited as at 31 March 2023
31 March 31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
=============================== ===== ========== ========== =============
Non-current assets
Property, plant and
equipment 8,780 10,086 9,458
Intangible assets 199 442 275
Right-of-use assets 33,592 36,515 35,400
Deferred tax 9a 1,711 2,987 1,354
=============================== ===== ========== ========== =============
44,281 50,030 46,487
Current assets
Trade and other receivables 9b 373,219 280,226 403,416
Trading investments 9c 61,964 55,512 36,071
Stock borrowing collateral 9d 23,834 26,378 20,354
Current income tax receivable 4,657 10,185 10,792
Derivative financial
instruments - 216 22
Cash and cash equivalents 9f 99,724 111,513 105,653
=============================== ===== ========== ========== =============
563,399 484,031 576,309
Current liabilities
Trade and other payables 9b (354,560) (267,616) (385,720)
Trading instruments 9e (31,782) (35,031) (10,340)
Lease liabilities (1,434) (504) (605)
=============================== ===== ========== ========== =============
(387,776) (303,151) (396,665)
Net current assets 175,622 180,880 179,644
Non-current liabilities
Lease liabilities (40,264) (40,091) (40,910)
Net assets 179,639 190,819 185,221
Equity
Share capital 5,718 5,718 5,718
Capital redemption reserve 534 534 534
Other reserves 7,127 6,683 10,641
Retained earnings 166,260 177,884 168,328
Total equity 179,639 190,819 185,221
=============================== ===== ========== ========== =============
Consolidated statement of changes in equity
Unaudited for the 6 months ended 31 March 2023
Share Capital redemption Other Retained Total
Capital reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ ======== =================== ========= ========= =========
Balance at 1 October
2022 5,718 534 10,641 168,328 185,221
Comprehensive income
for the period - - (1,227) 4,898 3,671
================================ ======== =================== ========= ========= =========
Dividends paid - - - (8,206) (8,206)
Net movement in Treasury
shares - - - (2,618) (2,618)
Movement in respect of
employee share plans - - (2,288) 3,717 1,429
Deferred tax related
to share-based payments - - - 142 142
================================ ======== =================== ========= ========= =========
Transactions with shareholders - - (2,288) (6,966) (9,253)
Balance at 31 March 2023 5,718 534 7,127 166,260 179,639
================================ ======== =================== ========= ========= =========
Share Capital redemption Other Retained Total
capital reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ ======== =================== ========= ========= =========
Balance at 1 October
2021 6,252 - 9,037 171,437 186,726
Comprehensive income
for the period - - 85 16,782 16,867
================================ ======== =================== ========= ========= =========
Treasury shares cancelled (534) 534 - - -
Dividends paid - - - (8,943) (8,943)
Net movement in Treasury
shares - - - (3,183) (3,183)
Movement in respect of
employee share plans - - (2,439) 2,353 (86)
Deferred tax related
to share-based payments - - - (562) (562)
================================ ======== =================== ========= ========= =========
Transactions with shareholders (534) 534 (2,439) (10,335) (12,774)
Balance at 31 March 2022 5,718 534 6,683 177,884 190,819
================================ ======== =================== ========= ========= =========
For the year ended 30 September 2022
Capital
Share redemption Other Retained Total
capital reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================= ======== ============ ========= ========= =========
Balance at 1 October 2021 6,252 - 9,037 171,437 186,726
Comprehensive income for
the year - - 1,051 18,761 19,812
================================= ======== ============ ========= ========= =========
Treasury shares cancelled (534) 534 - - -
Dividends paid - - - (15,580) (15,580)
Net movement in Treasury
shares - - - (8,183) (8,183)
Movement in respect of employee
share plans - - 553 2,442 2,995
Deferred tax related to
share-based payments - - - (549) (549)
================================= ======== ============ ========= ========= =========
Transactions with shareholders (534) 534 553 (21,870) (21,317)
Balance at 30 September
2022 5,718 534 10,641 168,328 185,221
================================= ======== ============ ========= ========= =========
Consolidated statement of cash flows
Unaudited for the 6 months ended 31 March 2023
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
================================= ===== =============== =============== =============
Cash flows generated from
operating activities 10 1,577 (2,794) 7,902
Taxation recovered/(paid) 4,800 (3,200) (7,164)
Interest received in relation
to operating activities 1,959 8 436
Net cash generated from
operating activities 8,336 (5,986) 1,174
================================= ===== =============== =============== =============
Investing activities
Purchase of property,
plant and equipment (274) (910) (1,114)
Purchase of intangible
assets - (13) (19)
Net cash used in investing
activities (274) (923) (1,133)
================================= ===== =============== =============== =============
Financing activities
Purchases of own shares
- Treasury (2,619) (3,183) (8,183)
Purchases of own shares
- Employee Benefit Trust (1,776) (3,359) (3,385)
Cash paid in respect of
lease arrangements - principal (308) (263) (555)
Interest paid (718) (287) (537)
Dividends paid (8,206) (8,943) (15,580)
Net cash used in financing
activities (13,626) (16,035) (28,240)
================================= ===== =============== =============== =============
Net movement in cash and
cash equivalents (5,564) (22,944) (28,199)
Opening cash and cash
equivalents 105,653 134,125 134,125
Net movement in cash and
cash equivalents (5,564) (22,944) (28,199)
Exchange movements (365) 332 (273)
Closing cash and cash
equivalents 99,724 111,513 105,653
================================= ===== =============== =============== =============
Notes to the Financial Statements
1. Basis of preparation and accounting policies
Basis of preparation
The consolidated financial information contained within these
financial statements is unaudited and does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006.
The preparation of these interim financial statements requires
the use of estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. The significant judgements and estimates
applied by the Group in these results have been applied on a
consistent basis with the statutory accounts for the year ended 30
September 2022. Although such estimates are based on management's
best knowledge of the amount, event or actions, actual results
ultimately may differ from those of estimates.
The interim consolidated financial information contained within
these financial statements has been prepared on the historical cost
basis, except for the revaluation of certain financial
instruments.
The interim consolidated financial information contained within
these financial statements has been prepared on a going concern
basis as the Directors have satisfied themselves that, at the time
of approving the financial information and having taken into
consideration the strength of the Group balance sheet and cash
balances, the Group has adequate resources to continue in
operational existence for at least the next twelve months.
Accounting policies
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. Numis
Corporation Plc transitioned to UK-adopted International Accounting
Standards in its consolidated financial statements on 1 October
2021. This change constitutes a change in accounting framework.
However, there is no impact on recognition, measurement or
disclosure in the period reported as a result of the change in
framework.
The consolidated financial information contained within these
financial statements has been prepared in accordance with
UK-adopted International Accounting Standards with the requirements
of the Companies Act 2006 as applicable to companies reporting
under those standards and are in accordance with the accounting
policies that were applied in the Group's statutory accounts for
the year ended 30 September 2022.
There are no new mandatory standards, amendments or
interpretations for the Group's and the Company's interim
accounting period ended 31 March 2023.
As at the date of authorisation of the financial statements,
there were no relevant standards, amendments or interpretations to
existing standards not yet effective, which have been early adopted
by the Group.
2. Segmental Reporting
Geographical information
The Group earns its revenue in the following geographical
locations:
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
========================== =============== =============== =============
United Kingdom 57,967 69,892 137,056
United States of America 4,303 4,261 7,141
Republic of Ireland 1,518 - 32
Revenue (see note 3) 63,788 74,153 144,229
========================== =============== =============== =============
The following is an analysis of the carrying amount of
non-current assets (excluding deferred tax assets) by the
geographical area in which the assets are located:
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
========================== =============== =============== =============
United Kingdom 40,299 44,682 42,225
United States of America 2,107 1,999 2,584
Republic of Ireland 164 361 323
Total non-current assets 42,570 47,043 45,132
========================== =============== =============== =============
Geographical information is based on the location of the
contracting legal entity.
3. Revenue
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
============================ =============== =============== =============
Net trading gains 4,161 6,478 12,764
Institutional income 17,444 19,633 37,314
============================ =============== =============== =============
Equities income 21,605 26,111 50,078
Corporate retainers 6,116 6,111 12,395
Advisory fees 24,204 17,246 39,023
Capital markets fees 11,863 24,685 42,733
============================ =============== =============== =============
Investment banking revenue 42,183 48,042 94,151
Total revenue 63,788 74,153 144,229
============================ =============== =============== =============
4. Other operating income/(loss)
Other operating income represents net gains/losses made on
investments which are held outside of the market-making portfolio,
which are disclosed within Trading Investments.
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
========================= =============== =============== =============
Investment activity net
gains/(losses) 543 442 (1,432)
========================= =============== =============== =============
5. Administrative expenses
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
=============================== =============== =============== =============
Wages and salaries 27,327 29,901 62,089
Social security costs 3,654 4,668 9,204
Pension costs 1,072 986 2,106
Share-based payments 3,206 3,025 6,345
Other staff costs 1,228 456 1,547
=============================== =============== =============== =============
Total staff costs 36,488 39,036 81,290
Depreciation of property,
plant and equipment 927 873 1,731
Depreciation of right-of-use
assets 1,609 1,554 3,063
Amortisation of intangible
assets 76 129 302
Other non-staff costs 19,104 18,554 37,330
=============================== =============== =============== =============
Total non-staff costs 21,717 21,110 42,426
Total administrative expenses 58,205 60,146 123,716
=============================== =============== =============== =============
The average number of employees during the period increased to
335 (31 March 2022: 324). Compensation costs as a percentage of
revenue increased to 57% (30 September 2022: 56%).
Other non-staff costs comprise expenses incurred in the normal
course of business, the most significant of which relate to
technology, information systems, market data, brokerage, clearing
and exchange fees.
6. Finance income / Finance costs
Finance income 6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
============================= =============== =============== =============
Interest income 2,047 8 477
Net foreign exchange gains - - 3,429
Total finance income 2,047 8 3,906
============================= =============== =============== =============
Finance costs 6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
============================= =============== =============== =============
Interest expense 277 174 495
Interest expense on lease
liabilities 776 791 1,636
Net foreign exchange losses 1,105 67 -
Total finance costs 2,157 1,032 2,131
============================= =============== =============== =============
Interest income comprises interest on cash balances. Net foreign
exchange gains/losses relate to activities in the normal course of
business and investments held in foreign currencies.
Interest expense comprises amounts paid on overdrawn balances
with clearing institutions and costs associated with the stand-by
RCF facility. Interest expense on lease liabilities relates to
leases accounted for under IFRS 16.
7. Earnings per share
Basic earnings per share is calculated on a profit after tax of
GBP4,898,000 (31 March 2022: GBP16,782,000) and 108,950,605 (31
March 2022: 111,295,087) ordinary shares being the weighted average
number of ordinary shares in issue during the year. Diluted
earnings per share takes account of contingently issuable shares
arising from share scheme award arrangements where their impact
would be dilutive. In accordance with IAS 33, potential ordinary
shares are only considered dilutive when their conversion would
decrease the profit or loss per share from continuing operations
attributable to the equity holders.
The calculations exclude shares held by the Employee Benefit
Trust on behalf of the Group and shares held in Treasury.
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
Number Number Number
Thousands Thousands Thousands
============================== =============== =============== =============
Weighted average number
of ordinary shares in issue
during the year - basic 108,951 111,295 110,730
Dilutive effect of share
awards 3,690 3,529 4,233
Diluted number of ordinary
shares 112,641 114,824 114,963
============================== =============== =============== =============
8. Dividends
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
================================== =============== =============== =============
Final dividend for year ended
30 September 2021 (8.00p) - 8,943 8,943
Interim dividend for year
ended 30 September 2022 (6.00p) - - 6,637
Final dividend for year ended
30 September 2022 (7.5p) 8,206 - -
Distribution to equity holders
of Numis Corporation Plc 8,206 8,943 15,580
================================== =============== =============== =============
The Board has approved an interim dividend of 6.0p per share
(2022: interim 6.0p per share). This dividend will be payable on 23
June 2023 to shareholders on the register of members at the close
of business on 19 May 2023. These results do not reflect this
dividend payable.
9. Balance sheet items
(a) Deferred tax
As at 31 March 2023 deferred tax assets totalling GBP1.7m (30
September 2022: GBP1.4m) have been recognised reflecting
management's confidence that there will be sufficient levels of
future taxable gains against which the deferred tax asset can be
utilised. The deferred tax asset principally comprises amounts in
respect of share-based payments, unutilised trading losses of
overseas affiliates and unrealised losses on the investment
portfolio.
(b) Trade and other receivables and Trade and other payables
Trade and other receivables and Trade and other payables
principally comprise amounts due from and due to clients, brokers
and other counterparties. Such amounts represent unsettled sold and
unsettled purchased securities transactions and are stated gross.
The magnitude of such balances varies with the level of business
being transacted around the reporting date. Included within Trade
and other receivables are cash collateral balances held with
securities clearing houses of GBP12.7m (30 September 2022:
GBP18.9m).
(c) Trading investments
Included within trading investments is GBP17.7m (30 September
2022: GBP18.4) of unlisted investments held outside of the market
making portfolio. During the interim period there were no new
investment purchases or disposals with the fair value net decrease
of GBP(0.7)m attributable as FX losses of GBP(1.2)m and net
portfolio revaluation GBP0.5m.
As at 31 March 2023 no trading investments had been pledged to
institutions under stock borrowing arrangements (30 September 2022:
nil).
(d) Stock borrowing collateral
The Group enters stock borrowing arrangements with certain
institutions which are entered into on a collateralised basis with
cash advanced as collateral. Under such arrangements a security is
purchased with a commitment to return it at a future date at an
agreed price.
The securities purchased are not recognised on the balance
sheet. An asset is recorded on the balance sheet as stock borrowing
collateral at the amount of cash collateral advanced.
(e) Trading instruments
Trading instruments comprise short positions in quoted
securities arising through the normal course of business in
facilitating client order flow and form part of the market making
portfolio.
(f) Cash and cash equivalents
Cash balances reflect movement in market making positions, the
operating performance of the business offset by dividend
distributions (GBP8.2m cash outflow) and share buy-backs through
the repurchase of shares into Treasury and the Employee Benefit
Trust (GBP4.4m cash outflow).
At 31 March 2023, the Group had a GBP50m unsecured Revolving
Credit Facility ('RCF') with Barclays and AIB. The facility was
undrawn at reporting date.
10. Reconciliation of profit before tax to cash flows from
operating activities
6 months ended 6 months ended Year ended
31 March 2022 30 September
31 March 2023 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
========================================== ========== =============== =============
Profit before tax 6,016 13,425 20,856
Net finance costs/(income) 110 1,024 (1,775)
Disposals of property, plant
and equipment - - 11
Depreciation charges on property,
plant and equipment 927 873 1,731
Depreciation charges on right-of-use
assets 1,561 1,554 3,063
Amortisation charges on intangible
assets 76 129 302
Share scheme charges 3,205 3,025 6,345
(Increase)/decrease in trading
investments (6,109) 3,460 7,050
Decrease in trade and other receivables 25,166 187,573 72,571
(Increase) in stock borrowing
collateral (3,526) (7,755) (1,731)
(Decrease) in trade and other
payables (25,871) (206,516) (101,129)
Decrease in derivatives 22 413 606
Cash flows from operating activities 1,577 (2,794) 7,902
========================================== ========== =============== =============
[1] Corporate client base includes 64 companies out of the FTSE
350. - Numis data (31 March 2023).
[2] Average market capitalisation of corporate client base
GBP1.0bn. - Numis data (31 March 2023).
[3] As at half year end 2023. - Numis data (31 March 2023).
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END
IR SSFFMLEDSELI
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May 05, 2023 02:00 ET (06:00 GMT)
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