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== Financials == The company in its current form (i.e. Peel Hunt LLP) was incorporated on 11th August 2010.<ref>https://find-and-update.company-information.service.gov.uk/company/OC357088</ref> However, the company began operations in 1988, via the corporate entity Peel Hunt Holdings Limited (previously KBC Peel Hunt Limited).<ref>https://find-and-update.company-information.service.gov.uk/company/02320252</ref> On 10th December 2010, the business and assets of Peel Hunt Holdings Limited was transferred to Peel Hunt LLP following the management buyout from its former ultimate parent company, KBC Bank NV, on 26th November 2010.<ref>https://find-and-update.company-information.service.gov.uk/company/OC357088/filing-history/MzA0OTEyNDc0MmFkaXF6a2N4/document?format=pdf&download=0</ref> <graph> { "version": 2, "padding": "auto", "data": [ { "name": "table", "values": [ {"year": 1990,"revenue": 1553}, {"year": 1991,"revenue": 1759}, {"year": 1992,"revenue": 2298}, {"year": 1993,"revenue": 2733}, {"year": 1994,"revenue": 4753}, {"year": 1995,"revenue": 4754}, {"year": 1996,"revenue": 4974}, {"year": 1997,"revenue": 10268}, {"year": 1998,"revenue": 10741}, {"year": 1999,"revenue": 11725}, {"year": 2000,"revenue": 40261}, {"year": 2001,"revenue": 16438}, {"year": 2002,"revenue": 18522}, {"year": 2003,"revenue": 25359}, {"year": 2004,"revenue": 43216}, {"year": 2005,"revenue": 53252}, {"year": 2006,"revenue": 55249}, {"year": 2007,"revenue": 57809}, {"year": 2008,"revenue": 36392}, {"year": 2009,"revenue": 66768}, {"year": 2011,"revenue": 32005}, {"year": 2012,"revenue": 39606}, {"year": 2013,"revenue": 32189}, {"year": 2014,"revenue": 58178}, {"year": 2015,"revenue": 46319}, {"year": 2016,"revenue": 64614}, {"year": 2017,"revenue": 70434}, {"year": 2018,"revenue": 89795}, {"year": 2019,"revenue": 68560}, {"year": 2020,"revenue": 95596}, {"year": 2021,"revenue": 196785}, {"year": 2022,"revenue": 131022}, {"year": 2023,"revenue": 82337}, ] }, { "name": "annotation", "values": [ {"start": 1990,"end": 2023,"text": "Past revenues"}, {"start": 2023,"end": 2060,"text": "Expected future revenues"} ] } ], "scales": [ { "name": "x", "type": "linear", "range": "width", "zero": false, "domain": {"data": "table","field": "year"} }, { "name": "y", "type": "linear", "range": "height", "nice": true, "domain": {"data": "table","field": "revenue"} }, { "name": "color", "type": "ordinal", "domain": {"data": "annotation","field": "text"}, "range": ["black","red"] } ], "axes": [ { "type": "x", "scale": "x", "format": "d", "title": "Year", "ticks": 15 }, { "type": "y", "scale": "y", "title": "Β£000", "grid": true, "layer": "back" } ], "marks": [ { "type": "rect", "from": {"data": "annotation"}, "properties": { "enter": { "x": {"scale": "x","field": "start"}, "y": {"value": 0}, "x2": {"scale": "x","field": "end"}, "y2": {"signal": "height"}, "fill": {"scale": "color","field": "text"}, "opacity": {"value": 0.2} } } }, { "type": "line", "from": {"data": "table"}, "properties": { "enter": { "interpolate": {"value": "monotone"}, "x": {"scale": "x","field": "year"}, "y": {"scale": "y","field": "revenue"}, "stroke": {"value": "steelblue"}, "strokeWidth": {"value": 3} } } }, { "type": "symbol", "from": {"data": "table"}, "properties": { "enter": { "x": {"scale": "x","field": "year"}, "y": {"scale": "y","field": "revenue"}, "stroke": {"value": "steelblue"}, "fill": {"value": "white"}, "size": {"value": 30} } } }, { "type": "text", "from": { "data": "table", "transform": [ { "type": "aggregate", "summarize": {"year": ["min","max"]} } ] }, "properties": { "enter": { "x": {"signal": "width","mult": 0.5}, "y": {"value": -10}, "text": { "template": "Peel Hunt's revenues over the lifetime of the company" }, "fill": {"value": "black"}, "fontSize": {"value": 16}, "align": {"value": "center"}, "fontWeight": {"value": "bold"} } } } ], "legends": [ { "fill": "color", "title": "Period", "properties": { "symbols": { "strokeWidth": {"value": 0}, "shape": {"value": "square"}, "opacity": {"value": 0.3} }, "legend": { "x": {"value": 10}, "y": {"value": 5}, "fill": {"value": "white"} } } } ] } </graph> {| class="wikitable" |+ !Year !1 !2 !3 !4 !5 !6 !7 !8 !9 !10 !11 !12 !13 !14 !15 !16 !17 !18 !19 !20 !21 !22 !23 !24 !25 !26 !27 !28 !29 !30 !31 !32 !33 !34 !35 !36 !37 !38 !39 !40 !41 !42 !43 !44 !45 !46 !47 !48 !49 !50 !51 !52 !53 !54 !55 !56 !57 !58 !59 !60 !61 !62 !63 !64 !65 !66 !67 !68 !69 !70 ! ! |- !Period end date !23/03/1990 !1/04/1991 !3/04/1992 !16/04/1993 !22/04/1994 !21/04/1995 !19/04/1996 !18/04/1997 !17/04/1998 !16/04/1999 !31/03/2000 !31/03/2001 !31/12/2001 !31/12/2002 !31/12/2003 !31/12/2004 !31/12/2005 !31/12/2006 !31/12/2007 !31/12/2008 !31/12/2009 !31/03/2011 !31/03/2012 !31/03/2013 !31/03/2014 !31/03/2015 !31/03/2016 !31/03/2017 !31/03/2018 !31/03/2019 !31/03/2020 !31/03/2021 !31/03/2022 !31/03/2023 !31/03/2024 !31/03/2025 !31/03/2026 !31/03/2027 !31/03/2028 !31/03/2029 !31/03/2030 !31/03/2031 !31/03/2032 !31/03/2033 !31/03/2034 !31/03/2035 !31/03/2036 !31/03/2037 !31/03/2038 !31/03/2039 !31/03/2040 !31/03/2041 !31/03/2042 !31/03/2043 !31/03/2044 !31/03/2045 !31/03/2046 !31/03/2047 !31/03/2048 !31/03/2049 !31/03/2050 !31/03/2051 !31/03/2052 !31/03/2053 !31/03/2054 !31/03/2055 !31/03/2056 !31/03/2057 !31/03/2058 !31/03/2059 ! ! |- !Period duration (days) ! !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 !366 !365 !365 !365 ! ! |- ! !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Historic !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast !Forecast ! ! |- ! colspan="73" |Profit and loss |- |Revenue |1,553 |1,759 |2,298 |2,733 |4,753 |4,754 |4,974 |10,268 |10,741 |11,725 |40,261 |35,946 |16,438 |18,522 |25,359 |43,216 |53,252 |55,249 |57,809 |36,392 |66,768 |32,005 |39,606 |32,189 |58,178 |46,319 |64,614 |70,434 |89,795 |68,560 |95,596 |196,785 |131,022 |82,337 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Administrative expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(53,829) |(76,219) |(82,377) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Profit from operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |142,956 |54,803 |(40) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Finance income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |30 |15 |692 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Finance expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(824) |(1,335) |(2,320) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |330 |58 |180 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Profit for the year before members' remuneration and profit share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |142,492 |53,541 |(1,488) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Members' remuneration charged as an expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(20,118) |(9,908) |0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Total comprehensive income for the year available for discretionary division among members | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |122,374 |43,633 |(1,488) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- ! colspan="73" |Balance sheet |- |Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Non-current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Property, plant and equipment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |9,687 |9,305 |8,092 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Intangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |87 |62 |1,152 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Right-of-use assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |19,508 |17,418 |15,889 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |273 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Total non-current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |29,282 |26,785 |25,406 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Securities held for trading | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |47,296 |50,341 |54,144 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Market and client debtors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |531,178 |559,485 |471,504 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Trade and other debtors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |13,460 |21,857 |15,546 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Amounts due from members | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |62 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Cash and cash equivalents | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |101,859 |69,916 |27,410 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Total current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |693,855 |701,599 |568,604 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Securities held for trading | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(33,727) |(32,705) |(32,062) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Market and client creditors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(464,796) |(505,475) |(421,953) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Amounts due to members | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(113,448) |(21,836) |0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Trade and other creditors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(13,933) |(26,658) |(4,214) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Loans and borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |0 |(15,000) |(6,000) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Lease liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(2,867) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Provisions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(431) |(540) |(576) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Total current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net current assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(626,335) |(602,214) |(467,672) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Non-current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |67,520 |99,385 |100,932 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Lease liabiliites | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(13,933) |(22,330) |(18,192) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Loans and borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |0 |(15,000) |(15,000) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Total non-current liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(21,462) |(37,330) |(33,192) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |75,340 |88,840 |93,146 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- ! colspan="73" |Cash flow |- |Net cash (used in) / generated from operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |5,476 |79,303 |(76,625) |(30,899) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Cash flow from investing activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Purchase of tangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(750) |(9,470) |(1,345) |(511) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Purchase of intangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(95) |(16) |(6) |(1,087) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Disposal of investments not held for trading | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net cash used in investing activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(845) |(9,486) |(1,351) |(1,598) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Cash flow from financing activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Capital introduced | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |15,000 |0 |13,500 |0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |(Decrease)/increase in borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |7,500 |(7,500) |30,000 |(6,000) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Lease Liability payments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(1,101) |(905) |0 |(3,117) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Interest paid | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |(133) |(253) |(467) |(1,382) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net cash (used in) / generated from financing activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |21,266 |(8,658) |43,033 |(16,812) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net (decrease) / increase in cash and cash equivalents | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |25,897 |61,158 |(31,943) |(49,309) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Cash and cash equivalents at beginning of the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |14,803 |40,701 |101,859 |76,719 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Cash and cash equivalents at end of the the period | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |40,700 |101,859 |69,916 |76,719 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- ! colspan="73" |Other information |- |Research payments and execution commission | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Execution services revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Investment banking revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- ! colspan="73" |Key metrics |- |Cost of goods sold as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |N/A |N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Operating expenses as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |27.35% |58.17% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Tax rate (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |N/A |N/A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Depreciation and amortisation rate (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Net borrowing as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |- |Interest expense as a proportion of revenue (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |} ==== What are the assumptions used to estimate the financial forecasts?==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- | colspan="3" | <div style="text-align: center;">'''Revenue'''</div> |- |What's the estimated current size of the total addressable market? |$400,000,000,000 |Here, the total addressable market (TAM) is defined as the global investment banking market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (6th January 2024), in terms of revenue, is $400 billion. |- |What is the estimated company lifespan? |50 years |Currently, Peel Hunt employs around 300, making the company a medium organisation (less than 10,000 employees). That said, given the company's mission, we expect the company to grow to a large organisation, and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3β5.</ref> |- |What's the estimated annual growth rate of the total addressable market over the lifecycle of the company? |3% |Research shows that the growth rate of the global investment banking market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>. |- |What's the estimated company peak market share? |1% |The Stockhub users estimate that especially given the leadership of the company, the peak market share of Peel Hunt is around 0.50%, and, therefore, suggests using the share amount here. As of 7th November 2023, Peel Hunt's current share of the market is estimated at around 0.00068%. |- |Which function do you want to use to estimate company revenue? |Logistic |Research suggests that the revenue pattern of companies is similar to the pattern produced by the logistic growth function (i.e. the revenue distribution is S-shaped)<ref>https://decisionanalyticsjournal.springeropen.com/articles/10.1186/2193-8636-1-2</ref>, so the Stockhub users suggest using that function here. |- |What's the estimated logistic growth rate of company revenue? | 5% |Another way of asking this question is this way: what is the projected rate of growth for the company's revenue following a logistic model? Based on Peel Hunt's current estimated revenue amount (i.e. Β£82 million) and Peel Hunt's estimated lifespan (i.e. 100 years) and Peel Hunt's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub users suggest using 5% annual logistic growth rate, so that's what's used here. |- | colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' |- |How many main stages of growth is the company expected to go through? | 4 stages |Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317β350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref> In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. The Stockhub users estimate that with Peel Hunt's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. Note, to account for one-off events, the three-year average (median) amount was used to calculate the cash flows. |- |What proportion of the company lifecycle is represented by growth stage 1? |30% |Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref> |- |What proportion of the company lifecycle is represented by growth stage 2? |10% |Research suggests 10%.<ref name=":6" /> |- | What proportion of the company lifecycle is represented by growth stage 3? |20% | Research suggests 20%.<ref name=":6" /> |- |What proportion of the company lifecycle is represented by growth stage 4? |40% |Research suggests 40%.<ref name=":6" /> |- | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>''' |- |Cost of goods sold as a proportion of revenue (%) |27.59% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |75.98% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |41.08% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |5.86% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |5.78% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |55.99% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |18.25% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |1.65% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>''' |- |Cost of goods sold as a proportion of revenue (%) |27.59% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |75.98% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |41.08% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |5.86% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) |5.78% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) |55.99% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |18.25% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |1.65% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' |- |Cost of goods sold as a proportion of revenue (%) |36.13% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Operating expenses as a proportion of revenue (%) |174.39% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Tax rate (%) |(1.94)% |Research suggests that it's best to use a similar rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Depreciation and amortisation rate (%) |47.29% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Fixed Capital Investment (FCInv) as a proportion of revenue (%) | 6.25% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Working Capital Investment (WCInv) as a proportion of revenue (%) | 2.13% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Net borrowing as a proportion of revenue (%) |0% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |- |Interest expense as a proportion of revenue (%) |0% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />. Information on the peers and the calculation of the figure used here can be found in the appendix of this report. |}
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