Numis doubles profits on wave of M&A

ONE of the City’s top independent stockbrokers and corporate advisory firms has enjoyed a near doubling in profits on the back of a rising wave of M&A activity.

Numis Corporation’s pretax profit soared by 86pc to £19.5m in the first half of its financial year, as fees from advising companies on corporate activity like mergers and acquisitions increased by more than three quarters to £50.9m in the six months to the end of March.

Alex Ham, co-chief executive of Numis, said M&A in the UK mid-cap market was “really ramping up”, while the company was also landing larger deals and more senior roles within them.

“Our pipeline, and there is a lot in it, suggests there is more M&A to come,” he added. “We have been busy and this is continuing into the second half of the year.”

Mr Ham, who is 35 and has been co-chief executive alongside Ross Mitchinson for two years, said the upswing in the sector was down to a number of factors. Listed companies with a lot of cash on the balance sheet are increasingly looking to use that money to acquire growth, while the availability of cheap debt makes it easy for firms to borrow.

Shareholders, Mr Ham said, are also encouraging companies to get involved in deals because they can see that those that have already done so have enjoyed an increase in share value.

On the private equity side, meanwhile, there was a lot of “dry powder” available on corporate balance sheets to do deals. The higher workload means Aim-listed Numis has been busy hiring staff. It took on 34 employees in the six-month period and promoted 40, taking the total headcount to 254. As a result, staff costs in the first half grew by 38pc to £38.4m. Numis has also taken on its biggest intake of graduates. The company had more than 2,000 applications for just nine graduate roles.

“We have a lot of ambition and are on a growth drive,” said Mr Ham. “The most important investment we can make is in people.”

There have been a number of senior hires as well, poached from larger investment banks.

“It goes to show we want to bring the best into the business and are increasingly able to make very senior, high quality hires from the big firms,” said Mr Ham.