City broker Peel Hunt posts profit despite Budget hit to deals

City broking group Peel Hunt has announced a return to profit in the first six months of its financial year, despite the Budget's impact on City dealmaking.

The London-listed investment bank reported a pre-tax profit of £1.2m, a significant increase from the £800m loss recorded in the same period last year, as reported by City AM.

Revenue increased by 26 per cent to £53.8m, driven by an increase in dealmaking and a resurgence 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," CEO Steven Fine stated.

However, he noted that recovery slowed over the summer and investor sentiment was affected in the final weeks of the period due to concerns about the UK Budget, particularly in relation to AIM. This refers to the easing of inheritance tax relief on London’s junior stock market AIM, which sparked backlash in the City ahead of the budget.

Peel Hunt suggested this week that the policy will cost the Chancellor £1bn overall rather than increase revenue. While Peel Hunt participated in two floats in the second half of the year, including RaspberryPi, it said M&A fees made up a large proportion of overall deal revenues.

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

Peel Hunt, a notable player among London's mid-market brokers and investment banks, has experienced the pinch due to the City's IPO dry spell over the last two years. The AIM-listed firm has reported losses amid a slump in deal-making activities and new listings in London.