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NUM Numis Corporation Plc

343.00
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Numis Corporation Plc LSE:NUM London Ordinary Share GB00B05M6465 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 343.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Numis Corporation PLC Half Year Results (8469X)

07/05/2021 7:00am

UK Regulatory


Numis (LSE:NUM)
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TIDMNUM

RNS Number : 8469X

Numis Corporation PLC

07 May 2021

Numis Corporation Plc

Half Year Results

for the six months ended 31 March 2021

London, 7 May 2021 Numis Corporation Plc ("Numis", "Group" or "Company") today announces unaudited interim results for the period ended 31 March 2021.

Highlights

-- Strong performance across all business areas delivering a record half year revenue performance

-- Recovery in UK equity markets and improved investor sentiment provided a favourable market backdrop

   --    Investment Banking revenues more than doubled to GBP82m 
   --    Further strategic progress in building Advisory and Growth Capital Solutions revenues 

-- Equities revenue increased 27% due to consistently strong trading gains and further market share gains with institutional clients

   --    Dividend maintained at 5.5p in line with policy and GBP11.5m spent on share repurchases 

-- Proposed Dublin office offers strategic opportunity to leverage Capital Markets capabilities in Europe

 
 Financial highlights             H1 2021     H1 2020     Change 
-------------------------------  ----------  ----------  ---------- 
 Revenue                          GBP115.4m   GBP63.1m    82.9% 
-------------------------------  ----------  ----------  ---------- 
 Underlying Operating profit      GBP38.8m    GBP9.1m     325% 
-------------------------------  ----------  ----------  ---------- 
 Profit before tax                GBP39.3m    GBP7.3m     442% 
-------------------------------  ----------  ----------  ---------- 
 EPS                              25.7p       5.5p        365% 
-------------------------------  ----------  ----------  ---------- 
 Cash                             GBP97.6m    GBP95.3m    2.4% 
-------------------------------  ----------  ----------  ---------- 
 Net assets                       GBP175.3m   GBP136.7m   28.2% 
-------------------------------  ----------  ----------  ---------- 
 
 Operating highlights 
-------------------------------  ----------  ----------  ---------- 
 Corporate clients                185         189         (2.1)% 
-------------------------------  ----------  ----------  ---------- 
 Average market cap of clients    GBP1,341m   GBP692m     94% 
-------------------------------  ----------  ----------  ---------- 
 Revenue per head (annualised)    GBP804k     GBP449k     79% 
-------------------------------  ----------  ----------  ---------- 
 Operating margin                 33.6%       14.5%       +19.1ppts 
-------------------------------  ----------  ----------  ---------- 
 Spend on share repurchases       GBP11.5m    GBP5.5m     108% 
-------------------------------  ----------  ----------  ---------- 
 

Notes:

1) Revenue, Underlying Operating profit, Operating margin and Revenue per head all exclude investment income / losses

   2)        Diluted EPS 

3) H1 2020 corporate clients excludes 20 Natural Resources clients given the subsequent exit from the sector

Alex Ham and Ross Mitchinson, Co-Chief Executive Officers, said:

"Our consistent focus on enhancing the firm's capabilities and strengthening our client relationships has contributed to an excellent and broad-based first half performance. Over the last 12 months we have generated revenues of more than GBP200m, an outcome we are particularly proud of given the range of expertise and advice demanded by our clients during this period. We also recognise the resilience and dynamism of our colleagues in achieving this performance in challenging circumstances.

Attracting and developing talent will, as always, remain a priority for us as we continue to target long term strategic growth opportunities including the international expansion of our Capital Markets business.

Whilst in the current environment there remains some short-term uncertainty, the business has great momentum, and the pipeline is strong. Execution of our Capital Markets pipeline will be influenced by equity market conditions but the outlook for the second half is encouraging."

Contacts:

Numis Corporation:

   Alex Ham & Ross Mitchinson, Co-Chief Executive Officers                       020 7260 1245 

Andrew Holloway, Chief Financial Officer 020 7260 1266

Brunswick:

Nick Cosgrove 020 7404 5959

Simone Selzer 020 7404 5959

Grant Thornton UK LLP (Nominated Adviser):

Philip Secrett 020 7728 2578

Harrison Clarke 020 7184 4384

Notes for Editors

Numis is a leading independent investment banking group offering a full range of research, execution, corporate broking and advisory services to companies in the UK and their investors. Numis is listed on AIM, and employs approximately 290 staff in London and New York.

The information, statements and opinions contained in this announcement do not constitute a public offer under any applicable legislation or an offer to sell or solicit of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

There are a number of key judgement areas, which are based on models and which are subject to ongoing modification and alteration. The reported numbers reflect our best estimates and judgements at the given point in time.

Forward-looking statements

This announcement contains forward-looking statements. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Such statements and forecasts involve risk and uncertainty because they 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. 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. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this announcement.

Subject to our obligations under the applicable laws and regulations of any relevant jurisdiction, in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise 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.

 
 
 

Business review

Numis delivered a record 6 month performance against the backdrop of a recovery in equity markets which benefitted all areas of the business. Overall, revenues increased 83% to GBP115.4m (2020: GBP63.1m) and Underlying Operating profit increased substantially to GBP38.8m (2020: GBP9.1m) reflecting the positive effect of operational gearing in the business. Profit before tax was GBP39.3m representing an increase of more than GBP30m relative to the comparative period and included GBP2.0m of gains recognised on investments held outside of our market making business (2020: GBP1.9m loss). Our balance sheet remains resilient with net assets of GBP175.3m, and our liquidity position was maintained despite new office related capital expenditure and higher share repurchase spend; cash balances were GBP97.6m (2020: GBP95.3m).

Market conditions

The 6 month period to 31 March 2021 featured a strong recovery in UK equity markets as positive vaccine newsflow supported consistent gains. In addition, the Brexit deal agreed in December 2020 improved investor sentiment toward the UK. Consequently, the UK has outperformed a number of other markets over the past 6 months and flows into UK equity funds have improved over the period. The FTSE 100 and FTSE250 were up 14% and 24% respectively over the six months, and whilst there has been a divergence in performance across sectors as a result of the pandemic, the recovery has been beneficial for our business.

As markets exhibited signs of a sustained recovery, volatility subsided, and corporate confidence returned, the environment for capital markets activity improved significantly. In particular this allowed the IPO market to function effectively and, as a result, IPO volumes over the past 6 months have been at their strongest level for many years. Overall, UK ECM volumes were materially ahead of the comparative period which was adversely impacted by the start of the pandemic and the pause in deal flow ahead of the UK general election. In addition, UK M&A volumes have started to recover driven by both domestic and international buyers identifying attractive investment opportunities and being able to secure the necessary financing.

Investment Banking

 
                             H1 2021  H1 2020  % 
                              GBPm     GBPm     Change 
---------------------------  -------  -------  ------- 
Capital Markets              63.3     22.8     177% 
---------------------------  -------  -------  ------- 
Advisory                     12.4     7.2      72.0% 
---------------------------  -------  -------  ------- 
Corporate retainers          6.3      6.8      (7.6)% 
---------------------------  -------  -------  ------- 
Investment Banking revenue   82.0     36.9     123% 
---------------------------  -------  -------  ------- 
 

Investment Banking revenue for the 6 months to 31 March 2021 was 123% higher than the first half of the prior year and 27% higher than the second half of FY20 which benefitted from a significant volume of COVID-19 related equity issuance. In comparison with the strong second half performance of FY20, we delivered an improved revenue performance across multiple products including IPOs, M&A, block trades and Growth Capital Solutions which, in aggregate, more than offset the decline in fund raising activity for our corporate clients. Whilst we have seen diversification by product in the period, there have been certain sectors such as Technology and Digital Consumer which have benefited from an acceleration of certain trends and therefore experienced higher activity levels as a result. Our investment in these sectors over many years, and the strength of our track record, ensured we were well positioned to benefit from the deal flow.

Both transaction volumes and average deal fees increased materially over the period. Growth in average deal fee has been a key feature of revenue growth in recent years and demonstrates the success of our long-term strategic focus on the corporate client base, our market position in ECM, and a growing contribution from Growth Capital Solutions which generally attracts higher fees. In the recent past around 70% of our deal fee revenue has been sourced from our retained client base, however for this six month period, more than 60% of our deal fee revenue is attributable to clients outside of our retained corporate client base. This reflects the enhanced reputation of the firm, a broadening range of capabilities and new international revenue opportunities.

Capital markets revenues almost tripled to GBP63.3m, led by a strong recovery in IPO volumes. Our consistently strong track record in mid market ECM enabled the firm to establish a leading market share in UK IPOs during this period of elevated activity. Whilst Numis has completed more main market IPOs than any other Investment Bank over the 6 month period, our focus will remain on securing leading roles for high quality issuers.

In addition to IPOs, Capital Markets revenues have benefited from the continued success of Growth Capital Solutions which has broadened its international network of leading technology disruptors and global investors. As the private markets continue to operate efficiently and the size of the market opportunity for us is growing we are continuing to invest in headcount and expand the capacity of the team to ensure we remain well positioned to leverage this trend in global capital markets.

Advisory revenues increased 72% relative to the comparative period reflecting both a recovery in UK M&A volumes, and our investment in sector specialisation and M&A execution capability in recent years. The supportive equity market backdrop has enabled our corporate clients to increasingly assess M&A opportunities, as a result we currently have a good pipeline of M&A mandates across both buy side and sell side which is encouraging for the second half outlook.

Retainer fee income decreased 8% relative to the comparative period due to the strategic decision to exit the Natural Resources sector during FY20 which resulted in a 10% reduction in client numbers. Excluding the impact of this closure, our client base was broadly flat for the period with client wins largely offset by clients lost to takeovers. The outlook for new corporate client wins is positive given the increased volume of IPOs will generate a pipeline of new high quality clients which should mitigate the impact of clients lost due to M&A.

The average market capitalisation of the client base continues to increase at a higher rate than growth in market indices. The average market capitalisation of the clients won was again materially ahead of those lost in the period reflecting our continued focus on strengthening the corporate client base and targeting businesses which we believe will be active and offer the most compelling revenue generating opportunities.

Equities

 
                       H1 2021  H1 2020  % 
                        GBPm     GBPm     change 
---------------------  -------  -------  ------- 
Institutional income   21.9     19.7     11.1% 
---------------------  -------  -------  ------- 
Trading                11.5     6.5      75.7% 
---------------------  -------  -------  ------- 
Equities revenue       33.4     26.2     27.3% 
---------------------  -------  -------  ------- 
 

Equities delivered growth of 27% relative to the comparative period which benefitted from the extreme volatility caused by the start of the pandemic. We have continued to focus on ensuring high levels of engagement with institutional clients and demonstrating the value of our experience across research, sales and trading.

During the period we strengthened the equities platform through a small number of selective hires as we continue to refine our offering and target further market share gains. The elevated activity levels across both secondary market volumes and capital markets presents opportunities for us to differentiate our comprehensive service which we believe is recognised and valued by our institutional clients. In addition, the overall strength of the Equities platform has been critical to our recent success in winning IPO mandates which contributed to a strong Investment Banking performance this half.

Institutional income, which comprises execution commission and payments for research, increased 11% compared to the first half of the prior year. Electronic trading is progressing in line with our expectations and continues to make an increasing contribution to execution revenues with a growing list of clients. As expected, Brexit has resulted in a reduction in institutional income from EU based clients. However, this forfeited revenue is not material and has been more than offset by revenue growth from US based accounts served by our New York office.

Trading book limits were increased during the half in view of the decline in market volatility and increasing demand for liquidity in small and mid cap equities. Our trading book achieved gains of GBP12m representing growth of 76% relative to the prior period.

EU office

We are progressing our plans to establish an EU presence in Dublin during the first half of FY22, subject to regulatory approval. Whilst Brexit has had minimal impact on the performance of the business, an EU office would both restore certain EU institutional client relationships and provide us with the opportunity to expand our Capital Markets offering throughout Europe with the benefit of passporting.

In recent years we have established relationships with some of the leading growth companies globally and built a network of international growth focused investors. Our growing reputation beyond the UK is presenting opportunities for Numis to participate in international mandates on an increasingly frequent basis. We believe this represents an excellent growth opportunity for the business over the longer term and we will be investing in capability across both Investment Banking and Equities within the new Irish subsidiary.

Investment portfolio

Our investment portfolio is currently valued at GBP16.2m and we recognised gains of GBP2.0m during the period, the majority of which related to a new investment made at the start of the period. We partially exited one investment during the period and expect to complete further exits during the second half as we seek liquidity events for our legacy holdings.

Costs and people

 
                             H1 2021  H1 2020  % 
                              GBPm     GBPm     Change 
---------------------------  -------  -------  --------- 
Staff costs                  55.2     31.3     76.0% 
---------------------------  -------  -------  --------- 
Share-based payments         5.8      5.2      11.2% 
---------------------------  -------  -------  --------- 
Non-staff costs              15.7     17.4     (10.0)% 
---------------------------  -------  -------  --------- 
Total administrative costs   76.7     54.0     42.0% 
---------------------------  -------  -------  --------- 
Period end headcount         287      285      0.7% 
---------------------------  -------  -------  --------- 
Average headcount            287      281      2.1% 
---------------------------  -------  -------  --------- 
Compensation ratio           52.8%    58.0%    (5.2)ppts 
---------------------------  -------  -------  --------- 
 

Average headcount was broadly in line with the prior period and the FY20 year end headcount. In an increasingly competitive market for talent we have continued to invest across the business in support of our strategic priorities. Our staff have shown great commitment in both navigating the challenges of remote working whilst originating and executing a very high volume of transactions. In response, we have introduced a number of initiatives to support staff and recognise their efforts during these challenging circumstances.

We expect headcount to increase in the second half of the year as we focus on Investment Banking hires to provide additional capacity to execute the anticipated volume of deals. In addition, we expect to grow the Growth Capital Solutions team in view of the consistent revenue growth achieved over the past 3 years.

Whilst fixed staff costs are marginally higher than the comparative period, staff costs overall have increased due to materially higher variable compensation reflecting the significant improvement in profit performance over the half. Our share based payment charge was GBP5.8m reflecting an increase of 11%. We expect the second half charge to reduce given the particularly high number of equity awards vested during the first half.

Compensation costs as a percentage of revenue decreased to 53%, lower than both the comparative period and the FY20 level reflecting the improved performance of the business. We continue to target an appropriate alignment between staff compensation, business performance and shareholder returns. Over the course of the second half of the year we may incur further investment spend related to our targeted hiring activities which may offset any further reductions in the compensation ratio.

Non-staff costs are marginally below the comparative period. Savings related to the business operating on a remote working basis for much of the period have been offset by a GBP0.7m increase in occupancy costs attributable to the commencement of our lease on the new office in February ahead of the anticipated relocation in September. In line with previous guidance, we expect the London office move to result in a total occupancy cost increase of GBP4m for FY21, and from FY22 our ongoing occupancy costs will be approximately GBP3m higher than FY20. In addition, we are likely to incur approximately GBP1m of exceptional expenses related to the relocation in the current year.

Capital and Liquidity

The Group's net asset position as at 31 March 2021 was GBP175.3m representing an increase of 11.2% compared to 30 September 2020. We continue to operate significantly in excess of our regulatory capital requirements and believe this provides the group with the flexibility to pursue strategic opportunities whilst also navigating the cyclical nature of our industry with confidence.

Our cash position was in line with the comparative period and below the FY20 year end position. During the half we started incurring capital expenditure on the new office fit-out and relocation project, the majority of this investment spend will occur in the second half. In addition, cash was utilised by an increase in our trading books reflecting the significantly improved market environment compared to last year when the Group's liquidity position benefited from a reduction in trading book limits due to pandemic related volatility. Our cash position is supplemented by a revolving credit facility which is currently undrawn, this facility has recently been extend on the same terms to 2023.

Dividends and share purchases

The Board has declared an interim dividend for the year of 5.5p per share in accordance with our stated policy. The dividend will be paid on 18 June 2021 to shareholders on the Register on 21 May 2021.

During the period we spent GBP11.5m on share repurchases compared to GBP5.5m in the previous period. This increase in repurchase spend was attributable to a higher than usual volume of share vestings in the period and associated tax offset purchases. Our share count remains 6m lower than 5 years ago, however we expect the share count to increase at the end of the second half of the year given the likely vesting of 2016 LTIP awards. Our intention remains to continue mitigating the impact of staff equity awards through buybacks over time. In addition, and in accordance with our returns policy, we will continue to review the possibility to return excess capital through buybacks and special dividends taking into consideration the capital and liquidity requirements of the Group's growth initiatives.

Current trading and outlook

The Investment Banking pipeline continues to benefit from a high volume of IPO mandates and the near term outlook for further Growth Capital Solutions and M&A revenues is also encouraging. We therefore expect the broad profile of Investment Banking revenues featured throughout the first half to be sustained in the second half of the year.

Whilst our pipeline is becoming more diversified by sector as market confidence builds across a wider range of industries, execution of the IPO pipeline in particular will be dependent upon the current positive market environment persisting.

Alex Ham & Ross Mitchinson

Co-Chief Executive Officers

7 May 2021

Consolidated Income Statement

UNAUDITED FOR THE 6 MONTHSED 31 MARCH 2021

 
                                                6 months    6 months 
                                                   ended       ended       Year ended 
                                                31 March    31 March     30 September 
                                                    2021        2020             2020 
                                               Unaudited   Unaudited          Audited 
                                  Notes          GBP'000     GBP'000          GBP'000 
-------------------------------  ------  ---------------  ----------  --------------- 
 Revenue                              3          115,426      63,104          154,899 
 
 Other operating income/(loss)        4            1,974     (1,904)              310 
-------------------------------  ------  ---------------  ----------  --------------- 
 Total income                                    117,400      61,200          155,209 
 
 Administrative expenses              5         (76,652)    (53,973)        (118,409) 
 Operating profit                                 40,748       7,227           36,800 
 
 Finance income                       6                1         420              986 
 Finance costs                        6          (1,422)       (390)            (723) 
-------------------------------  ------  ---------------  ----------  --------------- 
 Profit before tax                                39,327       7,257           37,063 
 
 Taxation                                        (9,549)     (1,003)          (5,713) 
 
 
   Profit after tax                               29,778       6,254           31,350 
-------------------------------  ------  ---------------  ----------  --------------- 
 
 Attributable to: 
 Owners of the parent                             29,778       6,254           31,350 
-------------------------------  ------  ---------------  ----------  --------------- 
 
 Earnings per share                   7 
   Basic                                           28.6p        6.0p            29.9p 
   Diluted                                         25.7p        5.5p            26.7p 
 
 

Consolidated Statement of Comprehensive Income

UNAUDITED FOR THE 6 MONTHSED 31 MARCH 2021

 
                                                6 months    6 months 
                                                   ended       ended       Year ended 
                                                31 March    31 March     30 September 
                                                    2021        2020             2020 
                                               Unaudited   Unaudited          Audited 
                                                 GBP'000     GBP'000          GBP'000 
---------------------------------------  ---------------  ----------  --------------- 
 Profit for the period                            29,778       6,254           31,350 
 
 Exchange differences on translation 
  of foreign operations                              (1)          27              227 
---------------------------------------  ---------------  ----------  --------------- 
 Other comprehensive income for 
  the period, net of tax                             (1)          27              227 
 
 Total comprehensive income for 
  the period, net of tax, attributable 
  to the owners of the parent                     29,777       6,281           31,577 
---------------------------------------  ---------------  ----------  --------------- 
 

Consolidated Balance Sheet

UNAUDITED AS AT 31 MARCH 2021

 
                                              31 March    31 March   30 September 
                                                  2021        2020           2020 
                                             Unaudited   Unaudited        Audited 
                                     Notes     GBP'000     GBP'000        GBP'000 
----------------------------------  ------  ----------  ----------  ------------- 
 Non-current assets 
 Property, plant and equipment                   3,680       2,418          2,596 
 Intangible assets                                 380         222            406 
 Right-of-use asset                     9a      39,463       5,045          4,020 
 Deferred tax                           9b       6,030       3,194          5,617 
----------------------------------  ------  ----------  ----------  ------------- 
                                                49,553      10,879         12,639 
 Current assets 
 Trade and other receivables            9c     410,415     246,151        326,156 
 Trading investments                    9d      51,501      25,367         38,089 
 Stock borrowing collateral             9e      21,769      10,658         18,222 
 Current income tax receivable                   1,060       1,004          1,332 
 Derivative financial instruments                    -           -             18 
 Cash and cash equivalents              9g      97,619      95,332        125,217 
----------------------------------  ------  ----------  ----------  ------------- 
                                               582,364     378,512        509,034 
 Current liabilities 
 Trade and other payables               9c   (393,505)   (236,176)      (340,265) 
 Financial liabilities                  9f    (23,322)    (10,882)       (19,170) 
 Lease liabilities                      9a     (1,129)     (1,925)        (1,962) 
                                             (417,956)   (248,983)      (361,397) 
 
 Net current assets                            164,408     129,529        147,637 
----------------------------------  ------  ----------  ----------  ------------- 
 
 
   Non-current liabilities 
 Lease liabilities                      9a    (38,684)     (3,736)        (2,643) 
----------------------------------  ------  ----------  ----------  ------------- 
 
 
 Net assets                                    175,277     136,672        157,633 
----------------------------------  ------  ----------  ----------  ------------- 
 
 Equity 
 Share capital                                   5,922       5,922          5,922 
 Other reserves                                 14,833      19,755         22,421 
 Retained earnings                             154,522     110,995        129,290 
----------------------------------  ------  ----------  ----------  ------------- 
 
 Total equity                                  175,277     136,672        157,633 
----------------------------------  ------  ----------  ----------  ------------- 
 

Consolidated Statement of Changes in Equity

UNAUDITED FOR THE 6 MONTHSED 31 MARCH 2021

 
                                                                   Other       Retained 
                                               Share capital    reserves       earnings      Total 
                                                     GBP'000     GBP'000        GBP'000    GBP'000 
 
 Balance at 1 October 2019                             5,922      20,639        111,593      138,154 
 
   Profit for the period                                                          6,254        6,254 
 Other comprehensive income                                           27              -           27 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 Total comprehensive income for 
  the period                                               -          27          6,254        6,281 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
   Dividends paid                                                               (6,787)      (6,787) 
 Movement in respect of employee 
  share plans                                                      (912)        (2,853)      (3,765) 
 Deferred tax related to share-based 
  payments                                                                        (647)        (647) 
 Net movement in Treasury shares                                                  3,436        3,436 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 Transactions with shareholders                            -       (912)        (6,852)      (7,763) 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
 Balance at 31 March 2020                              5,922      19,755        110,995      136,672 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
 Balance at 1 October 2019                             5,922      20,639        111,593      138,154 
 
   Profit for the year                                                           31,350       31,350 
 Other comprehensive income                                          227              -          227 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 Total comprehensive income for 
  the year                                                 -         227         31,350       31,577 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
 Dividends paid                                                                (12,582)     (12,582) 
 Movement in respect of employee 
  share plans                                                      1,555        (1,711)        (156) 
 Deferred tax related to share-based 
  payments                                                                          677          677 
 Net movement in Treasury shares                                                   (37)         (37) 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 Transactions with shareholders                            -       1,555       (13,653)     (12,098) 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
 Balance at 30 September 2020                          5,922      22,421        129,290      157,633 
--------------------------------------  ---  ---------------  ----------  -------------  ----------- 
 
 Balance at 1 October 2020                             5,922      20,421        129,290    157,633 
 
   Profit for the period                                                         29,778     29,778 
 Other comprehensive income                                          (1)              -        (1) 
-------------------------------------------  ---------------  ----------  -------------  --------- 
 Total comprehensive income for 
  the period                                               -         (1)         29,778     29,777 
-------------------------------------------  ---------------  ----------  -------------  --------- 
 
 Dividends paid                                                                 (6,825)    (6,825) 
 Movement in respect of employee 
  share plans                                                    (7,587)        (5,802)   (13,389) 
 Deferred tax related to share-based 
  payments                                                                          905        905 
 Net movement in Treasury shares                                                  7,176      7,176 
-------------------------------------------  ---------------  ----------  -------------  --------- 
 Transactions with shareholders                            -     (7,587)        (4,546)   (12,133) 
-------------------------------------------  ---------------  ----------  -------------  --------- 
 
 Balance at 31 March 2021                              5,922      14,833        154,522    175,277 
-------------------------------------------  ---------------  ----------  -------------  --------- 
 
 

Consolidated Statement of Cash Flows

UNAUDITED FOR THE 6 MONTHSED 31 MARCH 2021

 
                                                                    6 months 
                                                  6 months ended       ended     Year ended 
                                                                    31 March   30 September 
                                                   31 March 2021        2020           2020 
                                                       Unaudited   Unaudited        Audited 
                                          Notes          GBP'000     GBP'000        GBP'000 
---------------------------------------  ------  ---------------  ----------  ------------- 
 Cash flows from operating activities      10              3,988      28,175         76,051 
 Interest paid                                           (1,104)       (270)          (497) 
 Taxation paid                                           (8,785)     (3,464)        (9,601) 
---------------------------------------  ------  ---------------  ----------  ------------- 
 Net cash (used in)/from operating 
  activities                                             (5,901)      24,441         69,953 
 
 Investing activities 
 Purchase of property, plant and 
  equipment                                              (1,577)       (212)        (1,029) 
 Purchase of intangible assets                              (49)       (189)          (431) 
 Interest received                                             1         420            986 
 Net cash (used in)/from investing 
  activities                                             (1,625)          19          (474) 
 
 Financing activities 
 Purchase of own shares - Employee 
  Benefit Trust                                          (9,908)     (3,548)        (5,426) 
 Purchase of own shares - Treasury                       (1,555)     (1,953)        (4,344) 
 Cash paid in respect of lease 
  arrangements - principal                               (1,493)       (922)        (1,873) 
 Cash paid in respect of lease 
  arrangements - discount                                  (318)       (120)          (226) 
 Dividends paid                                          (6,825)     (6,787)       (12,582) 
---------------------------------------  ------  ---------------  ----------  ------------- 
 Net cash used in financing activities                  (20,099)    (13,330)       (24,451) 
 
 Net movement in cash and cash 
  equivalents                                           (27,625)      11,130         41,028 
---------------------------------------  ------  ---------------  ----------  ------------- 
 
 Opening cash and cash equivalents                       125,217      84,202         84,202 
 Net movement in cash and cash 
  equivalents                                           (27,625)      11,130         41,028 
 Exchange movements                                           27           -           (13) 
---------------------------------------  ------  ---------------  ----------  ------------- 
 
 Closing cash and cash equivalents                        97,619      95,332        125,217 
---------------------------------------  ------  ---------------  ----------  ------------- 
 

Notes to the Financial Statements

   1.      Basis of preparation 

Numis Corporation Plc is a UK AIM traded company incorporated and domiciled in the United Kingdom. The address of its registered office is 10 Paternoster Square, London, EC4M 7LT. The Company is incorporated in the United Kingdom under the Companies Act 2006 (company registration No. 2375296).

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. These financial statements have been prepared in accordance with AIM Rule 18. The statutory accounts for the year ended 30 September 2020, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and in accordance with International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, have been delivered to the Registrar of Companies. The report of the independent auditor on those statutory accounts contained no qualification or statement under Section 498(2) or (3) 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 judgements and estimates applied by the Group in these interim financial statements have been applied on a consistent basis with the statutory accounts for the year ended 30 September 2020. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those of estimates.

These interim financial statements are prepared on the historical cost basis, except for the revaluation of certain financial instruments.

These interim financial statements are prepared on a going concern basis as the directors have satisfied themselves that, at the time of approving these interim financial statements, the Group has adequate resources to continue in operational existence for at least the next twelve months.

During the period, there were no new standards or amendments to IFRS became effective and were adopted by the Company and the Group.

   2.     Segmental reporting 

Geographical information

The Group is managed as an integrated investment banking and equities business and although there are different revenue types (which are separately disclosed in note 3) the nature of the Group's activities is considered to be subject to the same and/or similar economic characteristics. Consequently, the Group is managed as a single business unit.

The Group earns its revenue in the following geographical locations:

 
                             6 months ended   6 months ended     Year ended 
                                                               30 September 
                              31 March 2021    31 March 2020           2020 
                                  Unaudited        Unaudited        Audited 
                                    GBP'000          GBP'000        GBP'000 
--------------------------  ---------------  ---------------  ------------- 
 United Kingdom                     110,271           60,358        144,333 
 United States of America             5,155            2,746         10,566 
                                    115,426           63,104        154,899 
--------------------------  ---------------  ---------------  ------------- 
 

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 
                                                               30 September 
                              31 March 2021    31 March 2020           2020 
                                  Unaudited        Unaudited        Audited 
                                    GBP'000          GBP'000        GBP'000 
--------------------------  ---------------  ---------------  ------------- 
 United Kingdom                      40,887            4,225          3,994 
 United States of America             2,636            3,460          3,028 
                                     43,523            7,685          7,022 
--------------------------  ---------------  ---------------  ------------- 
 

Other information

In addition, the analysis below sets out the income performance and net asset split between our investment banking and equities business and the equity holdings which constitute our investment portfolio.

 
                                                        6 months                6 months 
                                                           ended                   ended     Year ended 
                                                        31 March                31 March   30 September 
                                                            2021                    2020           2020 
                                                       Unaudited               Unaudited        Audited 
                                                         GBP'000                 GBP'000        GBP'000 
----------------------------------------  ----------------------  ----------------------  ------------- 
 Equities income                                          33,386                  26,233         53,195 
 Corporate retainers                                       6,293                   6,811         13,536 
 Total corporate transactions revenues                    75,747                  30,060         88,168 
----------------------------------------  ----------------------  ----------------------  ------------- 
 Revenue (see note 3)                                    115,426                  63,104        154,899 
 
 Investment activity net gains/(losses)                    1,974                 (1,904)            310 
 Contribution from investment portfolio                    1,974                 (1,904)            310 
----------------------------------------  ----------------------  ----------------------  ------------- 
 Total income                                            117,400                  61,200        155,209 
----------------------------------------  ----------------------  ----------------------  ------------- 
 
 
 
                                     6 months    6 months 
 Net assets                             ended       ended     Year ended 
                                     31 March    31 March   30 September 
                                         2021        2020           2020 
                                    Unaudited   Unaudited        Audited 
                                      GBP'000     GBP'000        GBP'000 
---------------------------------  ----------  ----------  ------------- 
 Investment banking and equities 
  activities                           61,434      28,380         17,685 
 Investing activities                  16,224      12,960         14,731 
 Cash and cash equivalents             97,619      95,332        125,217 
---------------------------------  ----------  ----------  ------------- 
 
   Total net assets                   175,277     136,672        157,633 
---------------------------------  ----------  ----------  ------------- 
 
 
   3.     Revenue 
 
                              6 months ended   6 months ended     Year ended 
                                                                30 September 
                               31 March 2021    31 March 2020           2020 
                                   Unaudited        Unaudited        Audited 
                                     GBP'000          GBP'000        GBP'000 
---------------------------  ---------------  ---------------  ------------- 
 Net trading gains                    11,507            6,548         16,003 
 Institutional income                 21,879           19,685         37,192 
---------------------------  ---------------  ---------------  ------------- 
 Equities income                      33,386           26,233         53,195 
 
   Corporate retainers                 6,293            6,811         13,536 
 Advisory                             12,428            7,225         11,146 
 Capital markets                      63,319           22,835         77,022 
---------------------------  ---------------  ---------------  ------------- 
 Investment banking income            82,040           36,871        101,704 
---------------------------  ---------------  ---------------  ------------- 
 Total                               115,426           63,104        154,899 
---------------------------  ---------------  ---------------  ------------- 
 
   4.      Other operating income/(loss) 

Other operating income/(loss) represents net gains or losses made on investments which are held outside of the market making portfolio. The gains or losses reflect price movements on quoted holdings, fair value adjustments on unquoted holdings and related dividend income. In the period, our portfolio of unquoted investments benefitted from positive valuation movements, specifically in relation to the release of previous downward valuation adjustments in relation to the impact from the COVID-19 pandemic.

   5.     Administrative expenses 
 
                                    6 months ended   6 months ended     Year ended 
                                                                      30 September 
                                     31 March 2021    31 March 2020           2020 
                                         Unaudited        Unaudited        Audited 
                                           GBP'000          GBP'000        GBP'000 
---------------------------------  ---------------  ---------------  ------------- 
 Wages and salaries                         45,719           26,285         63,086 
 Social security costs                       8,639            4,091         10,771 
 Compensation for loss of office                12              172            440 
 Pension costs                                 808              801          1,719 
 Share-based payments                        5,824            5,237          9,961 
 Staff costs                                61,002           36,586         85,977 
 
 
                                        6 months ended   6 months ended     Year ended 
                                                                          30 September 
                                         31 March 2021    31 March 2020           2020 
                                             Unaudited        Unaudited        Audited 
-------------------------------------  ---------------  ---------------  ------------- 
 Depreciation of property, plant 
  and equipment                                    492              584          1,223 
 Depreciation of right-of-use assets             1,229              862          1,793 
 Amortisation of intangible assets                  75               47            105 
 Other non-staff costs                          13,854           15,894         29,311 
 Non-staff costs                                15,650           17,387         32,432 
-------------------------------------  ---------------  ---------------  ------------- 
                                                76,652           53,973        118,409 
-------------------------------------  ---------------  ---------------  ------------- 
 

The average number of employees during the period has increased to 287 (31 March 2020: 281). Staff costs including share award related charges have increased by 66.7% compared to the prior period due to the improved operating performance resulting in higher variable compensation. Non-staff costs have decreased by 10.0% compared to the prior period.

   6.     Finance income and Finance costs 

Finance income for the period:

 
                               6 months ended   6 months ended     Year ended 
                                                                 30 September 
                                31 March 2021    31 March 2020           2020 
                                    Unaudited        Unaudited        Audited 
                                      GBP'000          GBP'000        GBP'000 
----------------------------  ---------------  ---------------  ------------- 
 Interest income                            1              226            261 
 Net foreign exchange gains                 -              194            650 
 Other income                               -                -             75 
----------------------------  ---------------  ---------------  ------------- 
                                            1              420            986 
----------------------------  ---------------  ---------------  ------------- 
 
 

Finance costs for the period:

 
                                       6 months ended   6 months ended     Year ended 
                                                                         30 September 
                                        31 March 2021    31 March 2020           2020 
                                            Unaudited        Unaudited        Audited 
                                              GBP'000          GBP'000        GBP'000 
------------------------------------  ---------------  ---------------  ------------- 
 Interest expense                                 211              270            497 
 Unwind of lease liability discount               318              120            226 
 Net foreign exchange losses                      893                -              - 
------------------------------------  ---------------  ---------------  ------------- 
                                                1,422              390            723 
------------------------------------  ---------------  ---------------  ------------- 
 

Finance costs have increased in the current financial year due to the unwinding of the lease liability discount for the new London office lease and foreign exchange losses in relation to US operations, due to the strengthening of GBP over the period.

   7.     Earnings per share 

Basic earnings per share is calculated on profits after tax of GBP29,778,000 (31 March 2020: GBP6,254,000) and 104,242,148 (31 March 2020: 104,162,166) ordinary shares being the weighted average number of ordinary shares in issue during the period. 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 per share or increase the loss per share from continuing operations attributable to the equity holders. Therefore, shares that may be considered dilutive while positive earnings are being reported may not be dilutive while losses are incurred.

The calculations exclude shares held by the Employee Benefit Trust on behalf of the Group and shares held in Treasury.

 
                                                          6 months 
                                        6 months ended       ended     Year ended 
                                                          31 March   30 September 
                                         31 March 2021        2020           2020 
                                             Unaudited   Unaudited        Audited 
                                                Number      Number         Number 
                                             Thousands   Thousands      Thousands 
-------------------------------------  ---------------  ----------  ------------- 
 Weighted average number of ordinary 
  shares in issue during the period 
  - basic                                      104,242     104,162        104,987 
 Dilutive effect of share awards                11,602       8,946         12,313 
-------------------------------------  ---------------  ----------  ------------- 
 Diluted number of ordinary shares             115,844     113,108        117,300 
-------------------------------------  ---------------  ----------  ------------- 
 
   8.     Dividends 
 
                                              6 months 
                                                 ended   6 months ended     Year ended 
                                              31 March                    30 September 
                                                  2021    31 March 2020           2020 
                                             Unaudited        Unaudited        Audited 
                                               GBP'000          GBP'000        GBP'000 
------------------------------------------  ----------  ---------------  ------------- 
 Final dividend year ended 30 September 
  2019 (6.50p)                                                    6,788          6,788 
 Interim dividend year ended 30 September 
  2020 (5.50p)                                                                   5,794 
 Final dividend year ended 30 September 
  2020 (6.50p)                                   6,825 
 Distribution to equity holders of 
  Numis Corporation Plc                          6,825            6,788         12,582 
------------------------------------------  ----------  ---------------  ------------- 
 

The Board has approved the payment of an interim dividend of 5.50p per share (2020: interim 5.50p per share). This dividend will be payable on 18 June 2021 to shareholders on the register of members at the close of business on 21 May 2021. These financial statements do not reflect this dividend payable.

Distributable reserves

Following an internal review of the Company's distributable reserves on a solo entity basis over the period from FY05 to date, a number of dividends and buybacks have been identified where the determination of distributable reserves was inconsistent with guidance on the application of the Companies Act 2006. The dividends concerned relate to numerous periods between FY06 and FY20, and the buybacks concerned relate to periods from FY13 to December 2020.

While sufficient distributable reserves existed in the consolidated Group at the times of all historic payments, the level of distributable reserves in the Company itself has been determined to have been insufficient. At the next AGM (February 2022), resolutions will be proposed to address the historic positions. The Group's current and historic capital positions are unaffected by the outcome of this review and Group's ability to make distributions in accordance with its dividend policy is unaffected.

   9.     Balance sheet items 
   (a)       Right-of-use asset and lease liabilities 

The right-of-use asset and lease liabilities (current and non-current) represent the two property leases that the Group currently uses for its offices in London and New York plus a new 15-year lease for a new office in London.

   (b)      Deferred tax 

As at 31 March 2021 deferred tax assets totalling GBP6,030,000 (30 September 2020: GBP5,617,000) have been recognised reflecting management's confidence that there will be sufficient levels of future taxable profits against which these deferred tax asset can be utilised. The deferred tax asset principally comprises amounts in respect of unvested share-based payments.

   (c)       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 GBP23,067,000 (30 September 2020: GBP12,687,000).

   (d)      Trading investments 

Included within trading investments is GBP16,224,000 (30 September 2020: GBP14,701,000) of investments held outside of the market making portfolio. The net increase during the period has been due to favourable revaluation movements largely attributable to the improving situation in relation to COVID-19 and the positive progress of a new investment in the period.

   (e)      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. Where cash has been used to affect the purchase, an asset is recorded on the balance sheet as stock borrowing collateral at the amount of cash collateral advanced or received.

   (f)       Financial liabilities 

Financial liabilities 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.

   (g)       Cash and cash equivalents 

Cash balances are in line with than those reported as at 31 March 2020. Dividend distributions have been maintained at a similar level to the prior period (GBP6.8m cash outflow). The repurchase of shares into Treasury and the Employee Benefit Trust have continued, but at a higher level than the prior period (GBP11.5m cash outflow).

   (h)      Investment commitment 

During 2018 the Company signed an investment subscription agreement in a U.S. private fund with a total subscription value of $1.0m. The full amount of the subscription had not been called upon at the balance sheet date. The fund calls upon capital as it is required and at the balance sheet date $960,000 had been called up and paid. This is classified within Trading Investments. The remaining $40,000 has not yet been called and is therefore a commitment until it is paid over to the fund. The subscription agreement allows that the investment can be called any time up till the 5th anniversary of the agreement, which is June 2023.

   10.     Reconciliation of profit before tax to cash from operating activities 
 
                                                                6 months 
                                              6 months ended       ended     Year ended 
                                                                31 March   30 September 
                                               31 March 2021        2020           2020 
                                                   Unaudited   Unaudited        Audited 
                                                     GBP'000     GBP'000        GBP'000 
-------------------------------------------  ---------------  ----------  ------------- 
 Profit before tax                                    39,327       7,257         37,063 
 Net finance expense/(income)                          1,421        (30)          (263) 
 Depreciation charge on property, 
  plant and equipment                                    492         584          1,223 
 Depreciation charge on right-of-use 
  asset                                                1,229         862          1,793 
 Amortisation charge on intangible 
  assets                                                  75          47            105 
 Share scheme charges                                  5,252       5,200          9,806 
 (Increase)/decrease in current 
  asset trading investments                         (13,412)      13,096            374 
 (Increase) in trade and other receivables          (84,259)    (58,893)      (138,898) 
 (Increase)/decrease in stock borrowing 
  collateral                                         (3,547)       3,982        (3,582) 
 Increase in trade and other payables                 57,392      54,292        166,669 
 Other balance sheet movements in 
  respect of leases                                        -         676            676 
 Decrease in derivatives                                  18       1,103          1,085 
 Cash from operating activities                        3,988      28,175         76,051 
-------------------------------------------  ---------------  ----------  ------------- 
 

The increase in cash from operating activities during the six months ended 31 March 2021 reflects an increase in profitability for the period, partially offset by an increase in current asset trading investments and outflows in respect of seasonal expense items which fall within the first half of our financial year.

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