Following a positive update in July, Numis Corp's (LON:NUM) year-end update confirmed that trading remained strong through to the financial year end (September). Both corporate and institutional sides of the business contributed to the outcome and prospectively the company indicates a strong deal pipeline. We have increased our estimate for FY17 to match company guidance but left FY18e revenue and pre-tax profit unchanged at this stage. Continuation of benign market conditions could mean the current year estimate proves conservative, while on a longer view the strength of the franchise Numis has established is a key attraction for investors.
Trading update
The year-end update indicates that FY17 revenue increased by 15% and profit by a similar percentage. Growth in Corporate Broking and Advisory (CB&A) and Equities were similar. Within CB&A, equity fund raises totalled £2.5bn (+38%) feeding into strong placing commissions. The generally positive trend in markets helped both trading revenues and institutional commissions to contribute to Equities growth. Looking ahead the group highlights a strong deal pipeline and mentions its increased focus on supporting unquoted companies through its Venture Broking operation. Discussions with clients relating to MiFID II continue. This is an area of uncertainty, as for other brokers, but the firm believes it is well positioned ahead of implementation (within our estimate institutional commissions accounted for c 28% of revenue FY17).
To read the entire report Please click on the pdf File Below: