UK stockbroking business Numis (NUM:AIM) saw its share price fall more than 5% on Friday after warning that it anticipated a fall in annual profit this year as the UK’s political quagmire hit trading volumes.
Brexit bickering and planning paralysis has scared off investors from UK markets while its IPO pipeline has almost ground to a halt. Brokers like Numis, which typical serve smaller and medium-sized businesses tend to make fees from bringing new companies to the stock market.
Numis shares have roughly halved since the worldwide stock market sell-off last October, falling from 412p to today’s 228.5p.
Numis said it expected its revenue for the second half of its financial year through September to be in line with the first half and slightly down on-year.
‘This will result in reported revenues for the full year showing a mid-to-high teens percentage decline compared to the prior year, and a somewhat greater fall in profit given the operational gearing inherent in the business,’ the company said.
Numis said political uncertainty and challenging market conditions that impacted its first-half performance had persisted throughout the second half.
‘UK equity capital markets volumes and trading activity in UK equities have both declined significantly compared to the prior year,’ it added.
Numis also announced that it had entered into a lease for new office space, given the upcoming expiry of its current lease. It planned to relocate during the second half of the 2021 financial year and expected the new office would give rise to an increase of about £3m to its ongoing property costs, commencing that year.
