Peel Hunt: City broker makes a loss amid economic headwinds
Investment bank Peel Hunt faced the pinch of economic and market struggles in its latest financial year as cost-cutting measures took a chunk out of the firm’s bottom line.
The City broker made a loss before tax of £3.5m, which the firm said was due to restructuring costs. But the company recorded a profit of £800m on an adjusted basis.
The firm’s balance sheet suffered a squeeze on the back of economic challenges damaging market sentiment.
Peel Hunt’s chief executive Steven Fine told City PM: “The last couple of months were just a big slap around the face with a wet haddock.
“I don’t think anyone saw that coming and I think markets literally just stopped. So rather than striding towards our year end, we sort of limped over there, which was a shame given the dramatic change in the business and everything we’ve got going on here.”
The broker took a 46.2 per cent hit to cash reserves, shrinking to £20.4m, whilst net assets tumbled 3.4 per cent to £88.7m.
Staff costs jumped 9.6 per cent to £55m, while total administration costs rose 6.6 per cent to £94m. The company said it had “reduced staff costs during the year through headcount reductions to support the business in moving towards profitability throughout the cycle”.
Average headcount decreased 3.6 per cent year-on-year.
Still, the firm managed to maintain a steady level of corporate clients at 147 – down only three from the previous year.
Despite the slowdown in market activity, the investment bank scraped a revenue of £91.3m, up from £85.8m.
This came as the business acted on two of the three prominent London market IPOs in the period, Raspberry Pi and AOTI Inc, and advised on 15 per cent of UK public merger and acquisiton deals.
The average market cap of clients increased over 15 per cent to £869.3m.
Investment banking revenue remained broadly flat at £31.5m, which the broker attributed to its “resilience in the face of challenging markets”.
As of March 2025, the investment bank acted for 147 corporate clients, with five FTSE 100 firms and 47 FTSE 250.
London market decline adds concern for economy
Peel Hunt said the “increasing rate” at which companies were ditching the London market would present a “significant challenge for the UK economy”.
But the broker said the new financial year had began on a positive note despite President Donald Trump’s tariff onslaught.
The Trump administration’s erratic trade policy had spurred a number of trade deals and increased likelihood of interest rate cuts.
Peel Hunt also said it was seeing the “rotation out of US assets into Europe and greater institutional positivity towards the UK”.
Fine added: “Our diversified offering meant we were able to support clients through these changing market conditions.
“As we continue to make strategic progress, we enter our next financial year well positioned. In the year ahead we will continue to build the business and drive further efficiencies as we target sustained profitability.”