2019 Annual Report and on Numis’ in Accordance with the Investment Association’S Share Capital Corporate Website
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Numis Annual Report and Accounts 2019 and Accounts Annual Report Dynamic client-focused investment banking Annual Report and Accounts 2019 The Numis difference At Numis, we strive to be the investment bank of a generation – a dynamic, creative investment bank driven to excel for our clients and with long-term partnerships at our heart. An investment bank for We have broad and deep UK- exciting times focused experience and expertise – In today’s fast-changing world, all-round capability orchestrated entrepreneurial high-growth for long-term success. We keep on companies need an investment investing in our strengths, staying bank they can trust to give them true to our ambition and building truly valuable connected advice and ever-stronger relationships, so that help. Just as importantly, investors together we can do great things looking to back these companies and deliver great value. need a trusted guide who can help them make the most of the opportunities. That’s what we’re here to do. Essentially, to help our clients – companies and investors – capitalise on growth and success. Our values Our values guide and 05 1 inspire us, we live our values day in day out 5 2 Partnership Creativity 4 3 Partnership Creativity Dynamism Excellence Message from Strategy the Co-CEOs in action Going from strength Excellence Standout achievements to strength Dynamism through the year Read the on pages 2 and 3, 38 16 and 39, 72 and 73, 118 and 119 12 Financial highlights Strategic Report What we do 04 Revenue (£m) Underlying operating profit (£m)* Chairman’s Statement 06 Business model 08 £111.6m £14.1m Our strategy 10 -18% -53% Our strategy in action 12 Key performance indicators 14 Total income (£m) Basic earnings per share (p) Message from the Co-CEOs 16 Business review 20 £109.4m 8.8p Engaging with our key stakeholders 24 -21% -65% Financial review 26 Principal risks 30 Cash balances (£m) Net assets (£m) Governance £84.2m £138.2m Board of Directors 40 -25% -4% Corporate Governance at a glance 42 Total dividend per share (p) Corporate Governance Report & Statement of Compliance 2019 44 Nominations Committee Report 52 12.0p Audit Committee Report 55 unchanged Risk Committee Report 58 Remuneration Committee Report 60 Statement of Directors’ Responsibilities 68 Directors’ Report 69 Business Financial Statements model 08 Our priority, as it always Independent Auditors’ Report 74 Our engine for success has been, is on matching Consolidated Income Statement 78 ambitious high growth Consolidated Statement companies that need of Comprehensive Income 79 capital to grow, and Consolidated Balance Sheet 80 investors who are attracted Consolidated Statement of Changes in Equity 81 to those opportunities. Consolidated Statement of We advise, analyse Cash Flows 82 and execute Alex Ham Co-Chief Executive Officer Company Balance Sheet 83 Company Statement of Ross Mitchinson Changes in Equity 84 Co-Chief Executive Officer Notes to the Financial Statements 85 Delivering a range of products Other Information and services Notice of Annual General Meeting 120 Information for shareholders 125 Alternative performance measures 126 For our clients Through an integrated Governance approach Committed to doing the right things 38 * The non-GAAP alternative performance measures shown here are described on page 126. Annual Report and Accounts 2019 | Numis Corporation Plc 01 Strategic Report We live our values day in, day out Partnership Partnership Long-term relationships built on shared ambition are at the heart of everything we do. • We strive to create unrivalled Partnership in action relationships based on trust and integrity and acting The way we work with our clients goes far beyond specific transactions, projects, tasks with purpose or requests. We are always thinking about • We constantly build our our clients – what might help them, who could help them, what would best serve network to be at the forefront their interests. So for example, this year for of every opportunity one of our global fintech clients we made • We provide a collaborative, a connection with a very large strategic investor for no other reason than we inclusive and supportive thought there might be ways for them to environment where people work together. That for us is partnership. can thrive 02 Numis Corporation Plc | Annual Report and Accounts 2019 Strategic Report Governance Financial Statements Other Information Strategic Report What we do 04 Chairman’s Statement 06 Business model 08 Our strategy 10 Our strategy in action 12 Key performance indicators 14 Message from the Co-CEOs 16 Business review 20 Engaging with our key stakeholders 24 Financial review 26 Principal risks 30 Annual Report and Accounts 2019 | Numis Corporation Plc 03 Strategic Report What we do We build strong long-term relationships with our clients by focusing on their needs and consistently excelling in providing their investment banking services. Our clients Our services We provide a comprehensive range of investment banking services across our two divisions. We advise, analyse Over and execute 200 diverse corporate Delivering a range of clients Investment Banking products and services We help companies and owners Investment Banking achieve their goals by providing advice • Corporate Broking FTSE 350 54 and sourcing the capital they need to • Equity Capital Markets Main market 97 fuel investment in their products, • Mergers & Acquisitions AIM 64 services and people. Our services • Debt Advisory Private 2 include: • Private Placements • Equity capital markets Equities Client size (average market cap £m) • M&A • Research • Debt advisory • Sales and Trading 2019 888 • Retained broker & adviser 2018 829 • Private capital raising 2017 723 For our clients 2016 569 2015 575 • Listed corporates • Investment trusts FTSE 350 corporate clients Equities • Private companies • Private equity funds 2019 54 We help our clients identify, assess and execute • Family offices 2018 49 • Sovereign wealth funds investment decisions. 2017 45 • Asset managers • Hedge funds 2016 45 Research We provide in-depth, high quality • Private client fund managers 2015 44 research, on UK listed companies. • Venture capital funds Our clients are in a wide range This level of research is one of the most of sectors including: valuable tools in any • Building, construction & real estate investment decision. • Healthcare & life sciences Through an Distribution and execution • FIG We provide powerful distribution and integrated approach • Media execution giving us a leading market • Resources Our integrated approach is driven share in equities. Our services include: • Support services by our strategy and we measure • UK, EU and US sales • Retail our performance with KPIs. • Execution • Technology • Trading • Travel & leisure Read more on pages 14 and 15 • Industrials See pages 20 to 29 to read more about our performance in the year 04 Numis Corporation Plc | Annual Report and Accounts 2019 Strategic Report Governance Financial Statements Other Information Strong track record 120 4 23% of our corporate clients have years of consistent The number of FTSE 350 clients has been with us for more than five years. dividend payments. grown 23% in the last five years. Revenue by product (£m) Client base (%) Extel survey Between 2013 and 2019 we were voted the top-ranked UK Small & Mid Cap Brokerage by institutions and, in 2014, 2015, 2016 and 2017, we were £111.6m voted the top-ranked UK Small & Mid (2018: £136.0m) Caps Brokerage by both institutions and companies. Capital markets 48.3 FTSE 350 25 Advisory 12.6 Other listed 75 Retainers 13.4 Institutional income 33.3 Trading profits 4.0 We are listed on AIM. Transaction highlights We have completed a number of major transactions AJ Bell Primary Health Properties Mucklow Unite Students Klarna £173m £393m £415m £1.4bn $460m Holdings Limited Sole Global Coordinator, Lead Financial Adviser, Sole Sponsor, Joint Financial Sole Financial Adviser Exclusive Adviser Sponsor and Bookrunner Sponsor and Joint Broker Adviser and Joint Bookrunner £173m placing and £651m £392.9m recommended all-share Recommended cash and shares offer £1.4bn acquisition of Liberty Living $460m private growth round Admission to the Official list merger with MedicX Fund of £414.7m from LondonMetric and £260m equity fundraise August 2019 December 2018 January 2019 Property July 2019 May 2019 Our people Where we operate 277 employees London New York Investment Banking 104 Research & Sales 92 Execution 12 264 13 Technology 17 employees employees Support 52 Annual Report and Accounts 2019 | Numis Corporation Plc 05 Strategic Report Chairman’s Statement Investing to achieve our ambition In 2019 we stayed true to Last year was a year of concerted investment in increasing the capabilities of our ambition and made the firm. This year we built on and benefited from this investment. Our ambition and direction remain unchanged – to make considerable progress despite the most of our drive and dynamism, our creative entrepreneurial spirit, our skills and the tough market conditions. capabilities to give our clients excellent service. And in so doing, to be a different kind of investment bank – the investment bank of a generation. Continuing to grow Without doubt, this was a tough year for everyone in the industry. Uncertainty surrounding Brexit continued through the year and is still as yet unresolved. Levels of business confidence and corporate activity were subdued, with for example the lowest number of IPOs on the London market for seven years. Against this backdrop