Profits fall at broker Numis after rise in staff numbers
PROFITS at City broker Numis Securities plunged 17pc for the year to September as a hiring spree meant it failed to cash in on a rise in M&A activity.
The company, whose clients include Aston Martin and Asos, said that extra hiring costs and “a year of investment” meant profits fell to £31.6m, despite advisory fees shooting up 21pc due to a boom in takeovers.
The business has traditionally won work on listings but in recent years has refocused its efforts on M&A, which generates lucrative fees and is an area previously dominated by big banks and specialist boutiques.
Co-chief executive Alex Ham, who at 35 is among the youngest bosses in the City, said that the listing market had “got a bit tougher” and the rise in advisory fees “does reflect a slight re-emphasis from us” towards acquisitions.
This year Numis advised Micro Focus on the £1.9bn sale of its software business to EQT Partners, French Connection on the sale of its stake in retail brand Toast, and Trinity Mirror on its bid for Richard Desmond’s Northern & Shell publishing titles.
The group also advised on luxury car maker Aston Martin’s initial public offering, which disappointed the market and caused a number of companies waiting in the wings to put their float plans on hold.
Mr Ham said that the business was not interested in going down the M&A route itself. A number of smaller City brokers are believed to be eyeing up a sale as the sector struggles with falling commissions, a volatile market and increased costs linked to new regulations.
Numis told investors that average headcount increased 15pc as a result of hiring across the company.