Peel Hunt swings back to profit despite Budget hit to dealmaking

City broking group Peel Hunt said it swung back into profit in the first six months of its financial year today despite the Budget weighing on dealmaking in the City.

In its half year results, the London listed investment bank posted a pre-tax profit of £1.2m, a 250 per cent rise on the £800,000 loss posted in the same period last year.

Revenue rose 26 per cent to £53.8m in the period, driven by an uptick in dealmaking and a rebound in appetite for IPOs.

“We were able to capitalise on improving market conditions in the first few months of FY25, most notably executing two IPOs, collecting material M&A fees and generating increased trading revenues,” boss Steven Fine said in a statement.

“However, the recovery slowed over the summer period and investor sentiment was impacted in the last few weeks of the period due to concerns around the UK Budget, particularly in relation to AIM.”

The comments point to the easing of inheritance tax relief on London’s junior stock market AIM, which triggered backlash in the City in the run up to the budget. In research this week, Peel Hunt has suggested the policy will cost the Chancellor £1bn overall rather than add to revenue.

While Peel Hunt played a part in two of the floats in the second half of the year, including that of RaspberryPi, the computer-maker, it said M&A fees had “comprised a large proportion of overall deal revenues”.

Investment bank revenue overall came in at £22.6m, up from £17.3m in the same period last year.

Peel Hunt has been among a crop of London’s mid market brokers and investment banks to feel the squeeze of the City’s IPO drought over the past two years. 

The AIM-listed bank has been pushed into the red by a downturn in dealmaking and fresh floats in the capital. Just 14 firms have floated across the London Stock Exchange’s two markets this year, after a sluggish 23 floats last year.

Meanwhile it has been among the loudest voices warning over the state market, warning that the pace of exits will be “relentless” unless lawmakers take fast action to intervene.