Peel Hunt

Company Overview: Peel Hunt is a leading independent investment bank in the UK, known for its strong focus on mid and small-cap companies. With a rich history dating back to 1989, the company has established itself as a trusted advisor and broker, offering services like investment banking, research, trading, and asset management.

Financial Performance: Peel Hunt has demonstrated robust financial health over recent years. The company has shown consistent revenue growth, underpinned by a diversified income stream and a resilient business model. Its balance sheet remains strong, with a healthy liquidity position and a prudent approach to risk management.

Market Position and Competitive Advantage: Peel Hunt occupies a unique position in the market, specialising in mid and small-cap companies. This focus, combined with its comprehensive service offering, has enabled the firm to build deep client relationships and a strong reputation. The company's research capabilities and sector expertise are also key differentiators.

Growth Prospects: The future growth trajectory for Peel Hunt appears promising. The company is well-positioned to benefit from the increasing activity in the mid and small-cap market segments. Furthermore, its ongoing investment in technology and expansion of services are likely to open new revenue streams and enhance client engagement.

Risks and Challenges: Key risks include market volatility, regulatory changes, and increasing competition. However, Peel Hunt's adaptable business model and proactive risk management strategies position it well to navigate these challenges.

Investment Rationale: Based on Peel Hunt's strong market position, consistent financial performance, and clear growth strategy, it presents as a compelling investment opportunity. The company's specialised focus, combined with its robust operational framework, positions it to capitalise on market opportunities and deliver sustainable value to shareholders.

Operations

How did the idea behind the company come about?

The idea behind Peel Hunt LLP originated from the desire to create a specialised, client-focused investment banking service. Founded in 1989 by Charles Peel and Christopher Holdsworth Hunt, the firm aimed to provide high-quality, independent advice and execution services to UK mid and small-cap companies. This focus on a specific market segment was somewhat unique at the time and set Peel Hunt apart from larger, more generalised investment banks. The firm's approach centered on building strong, lasting relationships with its clients, emphasising deep sector expertise, and providing tailored financial solutions. This dedication to serving a niche market effectively has been a defining characteristic of Peel Hunt since its inception.

What's the mission of the company?

The mission of Peel Hunt LLP is focused on "guiding and nurturing people through the evolution of business"​​. This mission statement highlights their commitment to supporting and advising their clients and stakeholders as the business landscape changes and evolves.

What's the company's flagship product and what makes it unique?

Peel Hunt LLP, as an investment bank, doesn't offer a "flagship product" in the traditional sense like a tech or consumer goods company. Instead, their primary offerings are financial services, specifically tailored to the mid and small-cap sectors in the UK. What makes Peel Hunt unique is its specialised focus on these market segments, providing expert advice and services in equity research, sales, and trading, as well as corporate broking, advisory services, and investment banking. Their emphasis on in-depth sector knowledge, coupled with a strong commitment to independent, client-focused advice, differentiates them in the financial services industry. This approach allows them to cater effectively to a specific group of clients, creating strong, lasting relationships and a reputation for tailored, high-quality service.

What is the price of the main offering(s)?

The pricing of Peel Hunt LLP's services, such as equity research, sales and trading, corporate broking, advisory services, and investment banking, is not typically publicly disclosed or standardised. These services are highly specialised and tailored to each client's needs, and as such, their pricing would vary depending on the complexity of the service, the scope of the engagement, the market segment, and other specific requirements of each client. Generally, in investment banking, fees can be structured as fixed amounts, percentages of the transaction value, or a combination of both, and are often negotiated on a case-by-case basis.

From which place(s) are the offerings able to be purchased?

Peel Hunt LLP's financial services and offerings are primarily accessible from their offices in the United Kingdom. The firm operates predominantly within the UK market, focusing on serving UK mid and small-cap companies. Clients typically engage with Peel Hunt through their corporate offices for various services such as equity research, trading, corporate broking, advisory services, and investment banking. These services are usually procured through direct business-to-business interactions and are tailored to the specific needs of each client, rather than being available for purchase in a conventional retail sense.

From which place(s) are the offerings promoted?

Peel Hunt LLP promotes its offerings primarily in the United Kingdom, reflecting its focus on the UK mid and small-cap markets. The firm leverages various channels for promotion, including its corporate website, industry events, financial news media, and professional networking opportunities. Additionally, as an investment bank, a significant portion of its promotion and client engagement likely occurs through direct, relationship-driven business development efforts, targeting specific sectors and companies that align with their expertise and service offerings.

What's the current strategy of the company?

Peel Hunt LLP's current strategy, as outlined in their 2023 annual report and other sources, revolves around the following key priorities:

1. Extending Leading Liquidity Provision: Peel Hunt has transformed from a market maker to a key liquidity provider, trading in over 5,000 UK securities and 9,800 overseas securities. They aim to continue this growth by adding incremental liquidity, expanding and diversifying trading counterparties, developing new digital infrastructure to live stream prices to alternative venues, and establishing new strategic partnerships with larger pan-European liquidity providers​​.
2. Expanding Investment Banking Capabilities: Having evolved from a corporate broking business to a specialist UK investment bank, Peel Hunt is focusing on building its track record with mid-cap and growth companies. The firm is diversifying its client base to include both public companies and its Private Capital Markets business. Additionally, they're expanding services in areas like M&A and Debt Advisory, and integrating investment banking teams with Research & Distribution to deepen relationships with institutional investors​​.
3. Advancing as a Distribution Powerhouse: Recognised for its award-winning research and experienced distribution teams, Peel Hunt is strengthening its role as a connector between investment institutions and companies. They are deepening relationships with institutional investors, expanding market share, and enhancing their international influence and access. Notably, they've invested in North American and European distribution platforms and are planning to establish a new European office in Copenhagen​​.
4. Embedding Technology in Operations: Technology is central to Peel Hunt's business strategy. The firm is investing in and innovating digital tools and infrastructure to maintain competitive pricing and secure access to liquidity. A notable development is the spinning out of their proprietary REX platform into a standalone business, RetailBook, aimed at expanding retail participation in capital markets​​.
5. Leveraging Unique Culture for Performance: Peel Hunt's collaborative culture is seen as a key strength, fostering team collaboration and an increased focus on performance. The firm encourages cross-functional projects and initiatives to drive strategic goals. A newly launched Investment Banking graduate program exemplifies their approach to harnessing internal talent and ideas​​.

These strategic priorities highlight Peel Hunt's focus on diversification, technology integration, and deepening client relationships, positioning them well for future growth despite challenging market conditions.

Who are the key members of the team and what makes them unique?

Listed company board

Key members of Peel Hunt LLP's team, each bringing unique experiences and expertise, include:

1. Lucinda Riches - Chair: Lucinda Riches is the Independent Non-Executive Chair of Peel Hunt. She has a distinguished career in investment banking, previously serving as Global Head of Equity Capital Markets at UBS. Her experience spans various non-executive roles, including at Ashtead plc, Greencoat UK Wind plc, and LGT Capital Partners Group Holding Ltd​​.
2. Maria Bentley - Non-Executive Director: Maria Bentley, with over 30 years of experience in financial services and investment banking, joined Peel Hunt's board in 2022. She has held senior human resources roles at Goldman Sachs, UBS Investment Bank, and Nomura International. She also serves as a non-executive director and chair of remuneration at various firms including Daiwa Capital Markets Europe Limited​​.
3. Liz Blythe - Non-Executive Director: Liz Blythe, who joined the board in 2020, has a background in audit and finance, having served as Chief Internal Auditor at Skipton Building Society and Finance Director at Homeloan Management Limited. She also holds roles as a non-executive director at other firms including Together Personal Finance​​.
4. Richard Brearley - Non-Executive Director: Richard Brearley, an Independent Non-Executive Director since 2020, has a strong background in compliance. He has held senior roles at Ninety One, Macquarie, and Investec plc, covering a range of markets and business areas​​.
5. Darren Carter - Non-Executive Director: Darren Carter has been with Peel Hunt since 2004, bringing over 30 years of equity markets experience. He has held senior positions at D. E. Shaw Securities International and KBC Financial Products, and is involved with other financial firms like Praetura Ventures and Praetura Debt​​.
6. Steven Fine - Chief Executive: Steven Fine has been with Peel Hunt since 2006 and played a pivotal role in the management buy-out from KBC Bank in 2010. He has extensive experience in equity, convertible, and derivatives operations, and is a non-executive director for the Quoted Companies Alliance​​.
7. Sunil Dhall - Chief Financial & Operating Officer: Sunil Dhall has been with Peel Hunt since 2010 and previously held senior roles at KBC Financial Products and Credit Suisse. He is active in initiatives to improve socio-economic diversity in UK financial services and holds a degree in Engineering, Economics, and Management from Keble College, Oxford​​.

These individuals contribute to Peel Hunt's strategic direction and operations with their diverse experiences and specialised expertise, underscoring the firm's commitment to leadership and excellence in the financial sector.

Executive board

1. Steven Fine - Chief Executive:
2. Sunil Dhall - Chief Financial & Operating Officer:
3. Fatima Badini - HR Director: Fatima Badini brings over 25 years of experience in senior HR and office management roles across various industries including financial services, US law firms, and insurance.
4. Alex Carter - Head of Equities: Alex Carter became Head of Equities in 2017, after joining Peel Hunt as Head of Sales in 2009.
5. Andrew Chapman - Head of Investment Banking: Andrew Chapman has been with Peel Hunt since 2010, previously working at Citi, Hoare Govett, and having over 35 years of Investment Banking experience.
6. Suzanne Clark - Chief Internal Auditor: Suzanne Clark joined Peel Hunt as Chief of Internal Audit in 2021 with over 25 years of experience in internal auditing across financial services.
7. David Curran - Chief Risk Officer: David Curran joined Peel Hunt in 2005 and was appointed Chief Risk Officer in June 2021.
8. Charles Hall - Head of Research: Charles Hall joined Peel Hunt as Head of Research in October 2008.
9. Piya Khanna - Chief Technology Officer: Piya Khanna joined Peel Hunt as Chief Technology Officer in October 2023.
10. Michael Lee - General Counsel: Michael Lee joined Peel Hunt as General Counsel in January 2022.
11. Iain Morgan - Head of Execution Services: Iain Morgan joined Peel Hunt’s Trading department in 2002 and became Head of Market Making in 2005.
12. Graham Smith - Finance Director: Graham Smith has been the Finance Director at Peel Hunt since 2012.

Management committee

1. Hayden Ballard - Head of Sales: Hayden Ballard, Head of Sales at Peel Hunt, has been with the firm for over 12 years, contributing significantly in various departments. He also spent two years in New York setting up Peel Hunt’s US office. He joined the firm right after achieving a 1st class degree in Modern History from Bristol University.
2. James Cooper - Head of IT Development: Information regarding James Cooper's background and tenure is not readily available.
3. Rachelle Cornel - Director of Marketing & Communications: Rachelle Cornel has been serving as the Director of Marketing & Communications at Peel Hunt. She joined the team with an extensive background in marketing and communications, though specific details about her previous roles or educational background are not provided.
4. Jon Gerty - Head of Group Compliance: Details about Jon Gerty, including his background and tenure, are not immediately available.
5. James Hipkiss - CEO, Peel Hunt International: James Hipkiss's specific background information and tenure as the CEO of Peel Hunt International are not specified in the available resources.
6. Clyde Lewis - Deputy Head of Research: Clyde Lewis's role as Deputy Head of Research at Peel Hunt is acknowledged, but further details about his career and educational background are not provided.
7. Billy Neve - Head of Management & Financial Reporting: Information on Billy Neve, including his career history and academic qualifications, is not explicitly detailed.
8. Matt Reali - Head of Sales Trading: Matt Reali's background and experiences leading up to his role as Head of Sales Trading at Peel Hunt are not detailed in the available sources.
9. James Schofield - Director of Operations: James Schofield's tenure and professional background as the Director of Operations at Peel Hunt are not specified in the sources.
10. Rob Terry - Head of Market Making: Detailed information regarding Rob Terry's career or educational background leading to his position as Head of Market Making at Peel Hunt is not available.
11. James Webb - Deputy Head of Execution Services: Specific information about James Webb's career and academic background is not provided.
12. Dan Webster - Deputy Head of Investment Banking: Dan Webster's professional background and experiences as Deputy Head of Investment Banking at Peel Hunt are not detailed in the sources.
13. Hester White - Director of Corporate Strategy: Information regarding Hester White, including her tenure and professional experiences leading up to her current role, is not readily available.

What's the company's TAM, SAM and SOM in terms of definition and figures?

Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) are metrics used to estimate the market potential for a business or product. However, for a company like Peel Hunt LLP, which operates in the investment banking and financial services sector, these terms are less frequently used or defined with specific figures, as their market potential is largely determined by the breadth of financial services they offer and the size of the UK mid and small-cap market segments they target.

1. TAM (Total Addressable Market): The total market demand for a product or service. For Peel Hunt, this would theoretically encompass the entire UK financial services market.
2. SAM (Serviceable Available Market): The segment of the TAM within a firm's reach. For Peel Hunt, this would be the UK mid and small-cap sectors that they specialise in.
3. SOM (Serviceable Obtainable Market): The portion of SAM that a company can capture. This depends on Peel Hunt's market share and competitive position in the UK financial services sector.

Specific figures for Peel Hunt's TAM, SAM, and SOM would require detailed market analysis and internal data, which are typically not publicly available for such specialised service sectors.

Who are the company's main peers and how are they similar and different to each other?

Peel Hunt LLP's main peers in the investment banking and financial services sector are other firms specialising in mid and small-cap markets in the UK. These would include companies like Numis Corporation, Panmure Gordon, and Shore Capital. Similarities:

• All these firms offer similar services such as equity research, corporate broking, trading, and advisory services.
• They focus on the UK market, particularly targeting mid and small-cap companies.

Differences:

• Peel Hunt distinguishes itself through its unique client-focused approach and deep sector expertise.
• The firm's emphasis on building long-term client relationships and its specialised focus on the UK mid and small-cap sector set it apart from its peers.
• Additionally, Peel Hunt's strategic priorities, like expanding its investment banking capabilities and leveraging technology, contribute to its distinct positioning in the market.

This table illustrates the differences and similarities between Peel Hunt LLP and its peers (such as Numis Corporation, Panmure Gordon, and Shore Capital):

Feature/Company	Peel Hunt LLP	Numis Corporation	Panmure Gordon	Shore Capital	Investec	Jefferies Group LLC	Stifel Financial Corp.	Canaccord Genuity Group	HSBC Holdings plc	Barclays Investment Bank	JP Morgan Cazenove	Goldman Sachs Group
Equity Research	✓	✓	✓	✓
Corporate Broking	✓	✓	✓	✓
Trading Services	✓	✓	✓	✓
Advisory Services	✓	✓	✓	✓
UK Market Focus	✓	✓	✓	✓
Mid and Small-Cap Focus	✓	✓	✓	✓
Client-Focused Approach	✓	✓/✗	✓/✗	✓/✗
Deep Sector Expertise	✓	✓/✗	✓/✗	✓/✗
Investment Banking Expansion	✓	✓/✗	✓/✗	✓/✗
Technology Emphasis	✓	✓/✗	✓/✗	✓/✗

✓ = Feature is present ✗ = Feature may vary or be less emphasised

This table highlights that while these firms share a core set of services and market focus, differences emerge in their approach, emphasis on expansion, and technology integration. Peel Hunt, for example, is particularly known for its client-focused approach and emphasis on technology.

Financials

The company was incorporated on 11th August 2011.

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
Period end date	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	31/03/2060	31/03/2061
Period duration (days)	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	365	366
	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	Forecast	Forecast
Profit and loss
Revenue								68,560	95,596	196,785	131,022	82,337
Administrative expenses										(53,829)	(76,219)
Profit from operations										142,956	54,803
Finance income										30	15
Finance expense										(824)	(1,335)
Other income										330	58
Profit for the year before members' remuneration and profit share										142,492	53,541
Members' remuneration charged as an expense										(20,118)	(9,908)
Total comprehensive income for the year available for discretionary division among members										122,374	43,633
Balance sheet
Assets
Non-current assets
Property, plant and equipment										9,687	9,305
Intangible assets										87	62
Right-of-use assets										19,508	17,418
Deferred tax asset
Total non-current assets										29,282	26,785
Current assets
Securities held for trading										47,296	50,341
Market and client debtors										531,178	559,485
Trade and other debtors										13,460	21,857
Amounts due from members										62
Cash and cash equivalents										101,859	69,916
Total current assets										693,855	701,599
Liabilities
Current liabilities
Securities held for trading										(33,727)	(32,705)
Market and client creditors										(464,796)	(505,475)
Amounts due to members										(113,448)	(21,836)
Trade and other creditors										(13,933)	(26,658)
Loans and borrowings										0	(15,000)
Provisions										(431)	(540)
Total current liabilities
Net current assets										(626,335)	(602,214)
Non-current liabilities										67,520	99,385
Lease liabiliites										(13,933)	(22,330)
Loans and borrowings										0	(15,000)
Total non-current liabilities										(21,462)	(37,330)
Net assets										75,340	88,840
Cash flow
Net cash (used in) / generated from operations									5,476	79,303	(76,625)
Cash flow from investing activities
Purchase of tangible assets									(750)	(9,470)	(1,345)
Purchase of intangible assets									(95)	(16)	(6)
Disposal of investments not held for trading
Net cash used in investing activities									(845)	(9,486)	(1,351)
Cash flow from financing activities
Capital introduced									15,000	0	13,500
(Decrease)/increase in borrowings									7,500	(7,500)	30,000
Lease Liability payments									(1,101)	(905)	0
Interest paid									(133)	(253)	(467)
Net cash (used in) / generated from financing activities									21,266	(8,658)	43,033
Net (decrease) / increase in cash and cash equivalents									25,897	61,158	(31,943)
Cash and cash equivalents at beginning of the period									14,803	40,701	101,859
Cash and cash equivalents at end of the the period									40,700	101,859	69,916
Other information
Research payments and execution commission
Execution services revenue
Investment banking revenue
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?

Key inputs

Description	Value	Commentary
Revenue
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 HR tech market, and based on a number of assumptions, it is estimated that the size of the market as of today (7th November 2023), in terms of revenue, is $400 billion.
What is the estimated company lifespan?	50 years	Currently, Peel Hunt employs around 77, making the company a small 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.
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 HR tech 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).
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 distribution function do you want to use to estimate company revenue?	Gaussian	Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped), so the Stockhub users suggest using that function here.
What's the estimated standard deviation of company revenue?	5 years	Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Peel Hunt's current estimated revenue amount (i.e. $2.7 million) and Peel Hunt's estimated lifespan (i.e. 50 years) and Peel Hunt's estimated current stage of its lifecycle (i.e. introduction stage), the Stockhub users suggest using five years (i.e. 68% of all sales happen within five years either side of the mean year), so that's what's used here.
Growth stages
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. 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. 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. 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%.
What proportion of the company lifecycle is represented by growth stage 2?	10%	Research suggests 10%.
What proportion of the company lifecycle is represented by growth stage 3?	20%	Research suggests 20%.
What proportion of the company lifecycle is represented by growth stage 4?	40%	Research suggests 40%.
Growth stage 2
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). 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). 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). 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). 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). 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). 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). 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). Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Growth stage 3
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). 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). 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). 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). 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). 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). 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). 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). Information on the peers and the calculation of the figure used here can be found in the appendix of this report.
Growth stage 4
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). 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). 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). 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). 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). 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). 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). 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). Information on the peers and the calculation of the figure used here can be found in the appendix of this report.

Risks

As with any investment, investing in Peel Hunt carries a level of risk. Overall, based on the Peel Hunt' adjusted beta (i.e. 0.86), the degree of risk associated with an investment in Peel Hunt is 'medium'.

Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used the 25 available share price Peel Hunt data points. We note that the amount of available data observations for Peel Hunt is less than what's typically used in the five years of monthly data beta calculation (i.e. 25 observations vs. 60 observations), and accordingly, calculating the beta of such a company may be considered by many to be abnormal; however, for the benefit of simplifying investment comparisons and decision making, we believe that a single standardised risk measure is useful, and that the most appropriate measure is beta.

The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.50 and 1.50. Further information about the beta ratings can be found in the appendix section of this report.

The key risks

Investing in Peel Hunt LLP involves several key risks:

1. The group’s business and financial performance have been and will continue to be affected by general economic conditions in the UK and other jurisdictions in which the group operates and adverse developments int he UK or global financial markets could have a detrimental impact on its earnings and profitability.
2. The group relies on the ability to attract, develop and retain highly skilled personnel.
3. Damage to the group’s reputation could cause harm to the group and its business prospects.
4. The group’s business is subject to inherent risks concerning liquidity, and this may have an adverse effect on the group’s business and profitability.
5. The group’s results of operations may be materially affected by market fluctuations and significant changes in the value of financial instruments.
6. A failure in the group’s operational systems may disrupt the group’s business operations, result in regulatory action against the group, and adversely impact the group’s reputation, business, financial condition and results of operations.
7. The group is exposed to risks relating to its underwriting activities.
8. The group is subject to the credit risk of counterparties.
9. The group's framework and policies for risk management may prove inadequate for the risks faced by its business and any failure to properly manage the risks it faces could cause harm to the group and its business prospects.
10. Failure to, or perceived failure to, appropriately manage potential conflicts of interest can adversely affect the group’s business and reputation.
11. The group's competitive advantage depends in part on its information technology.
12. The group faces significant and increasing competition in the financial services industry, including in changing markets.
13. The group may be unable to successfully implement its business strategies.
14. The group may be unable to protect its intellectual property effectively from misappropriation by others, including current and potential competitors.
15. The group operates in an extensive, strict, and frequently changing regulatory landscape and any changes to, or the group’s failure to comply with, any laws and regulations could adversely affect the Group’s business, financial condition and results of operation.
16. If employees of the group fail to comply with applicable laws, rules and regulations, including those associated with conduct risk or fail to adapt its business to new laws and regulations, the group could be subject to disciplinary actions, fines and loss of licences to provide its services.
17. The group is subject to risks relating to litigation, investigations, claims and potential liabilities under laws and regulations applicable to financial services.
18. Regulatory and other changes resulting from the UK’s exit from the EU could impact the group’s results.
19. The group’s collection, use, storage, disclosure, transfer and other processing of personal information could give rise to significant costs and liabilities, including as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights, which may have a material and adverse impact on the group’s business, financial condition and results of operations.
20. The group is subject to anti-bribery and corruption and anti-money laundering laws and regulations and sanctions and embargo programmes.
21. The group may be negatively impacted by the failure of its information technology and communications systems and related operational processes, including through cyberattacks.
22. The group’s insurance coverage may not be adequate to cover all possible losses that it could suffer and its insurance costs may increase.
23. A change in taxation legislation, case law or practice of tax authorities or investigations by tax authorities in key jurisdictions could materially increase the group’s costs.
24. An active trading market for the ordinary shares may not develop or be sustained.
25. There are no guarantees that the company will pay dividends or regarding the level of any such dividends.
26. Substantial future sales of ordinary shares could impact their market price.
27. The market price of the ordinary shares may fluctuate significantly in response to a number of factors, many of which will be out of the company's control.
28. Future issues of new ordinary shares may dilute the holdings of shareholders.
29. Shareholders may be diluted as a result of future equity offerings to the extent they do not participate or are excluded from participating.
30. General risks of investing in shares traded on AIM.
31. Regulatory approvals are required to increase a shareholding in the company above certain percentage thresholds of its capital.
32. Management and Governance: Less than half of Peel Hunt's directors are independent, and there's a relatively inexperienced board with an average tenure of only 2.2 years. Additionally, CEO Steven Fine's compensation has been a point of discussion, being above average for companies of similar size in the UK market.
33. Business Model and Strategy: Peel Hunt's unique business model includes serving retail investors through intermediaries, which diversifies its business and reduces exposure to the capital markets cycle.

Valuation

What's the expected return of an investment in the company?

The Stockhub users estimate that the expected return of an investment in the company over the next five years is 12x, which equates to an annual return of 67%. In other words, an £100,000 investment in the company is expected to return £1,302,058 in five years time. The assumptions used to estimate the return figure can be found in the table below.

Assuming that a suitable return level over five years is 67% per year or less, and Peel Hunt achieves its expected return level (of 67%), then an investment in the company is considered to be an 'suitable' one.

What are the assumptions used to estimate the return?

Key inputs

Description	Value	Commentary
Which valuation model do you want to use?	Discounted cash flow	Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that he Stockhub users suggest to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report). Peel Hunt has never paid cash dividends, and on 7th February 2022, it said that it currently does not anticipate paying any cash dividends in the foreseeable future. Accordingly, the Stockhub users suggest using the free cash flow valuation method (rather than the dividend discount model).
Which financial forecasts to use?	Stockhub	The only available long-term forecasts (i.e. >15 years) are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so the Stockhub users suggest using those.
Growth stage 2
Discount rate (%)	15%	There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
Probability of success (%)	80%	Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 80%.
Growth stage 3
Discount rate (%)	10%	There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
Probability of success (%)	100%	Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
Growth stage 4
Discount rate (%)	10%	There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
Probability of success (%)	100%	Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%.
Other key inputs
What's the current value of the company?	£127.11 million	The current valuation of Peel Hunt as of 27th December 2023 is £127.11 million.
Which time period do you want to use to estimate the expected return?	Between now and five years time	Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years. Accordingly, Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
Which valuation recommendation method do you want to use?	Relative	There's two main types of valuation recommendation methods, relative and absolute. The relative method determines the investment recommendation relative to other investments (e.g. the investment is "suitable" if it's within say the top 10% of the investment universe in terms of investment returns), whereas the absolute method determines the recommendation based on a fixed return amount (e.g. the investment is "suitable" if it returns 50% or more). Assuming sufficient data, the Stockhub users suggest using the relative method.
Which top proportion of the investment universe constitutes a "suitable" rating?	10%	The proportion depends on the user's preference. That said, typically, the higher the proportion, the higher the risk associated with the investment.
Which universe of investments do you want to use?	All investments	If the main objective of the user is to maximise investment returns, then the Stockhub users suggest using 'all investments' as the investment universe.

Sensitivity analysis

The main inputs that result in the greatest change in the expected return of the Peel Hunt investment are, in order of importance (from highest to lowest):

1. The size of the total addressable market (the default size is $400 billion);
2. Peel Hunt peak market share (the default share is 0.50%); and
3. The discount rate (the default time-weighted average rate is 16.50%).

The impact of a 50% change in those main inputs to the expected return of the Peel Hunt investment is shown in the table below.

Peel Hunt investment expected return sensitivity analysis

Main input	50% worse	Unchanged	50% better
The discount rate	ccc%	ccc%	ccc%
The size of the total addressable market	ccc%	ccc%	ccc%
Peel Hunt peak market share	ccc%	ccc%	ccc%

Actions

To invest in Peel Hunt, click here.

To contact Peel Hunt, click here.

Appendix

Relative valuation approach

As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach.

What's the expected return of an investment in Peel Hunt using the relative valuation approach?

Stockhub estimates that the expected return of an investment in Peel Hunt over the next five years is 38x, which equates to an annual return of 108%. In other words, an £100,000 investment in the company is expected to return £3,933,322 in five years time. The assumptions used to estimate the return figure can be found in the table below.

What are the assumptions used to estimate the return figure?

Key inputs

Description	Value	Commentary
Which type of multiple do you want to use?	Growth-adjusted EV/sales	For the numerator, the Stockhub users believe that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, the Stockhub users believe that because it expects Peel Hunt to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the Stockhub users suggest valuing its company using the EV/sales ratio. However, the Stockhub users think that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple.
In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use?	Year 5	Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use?	Year 6, from now	Stockhub suggests that for the sales growth figure, it's best to use Year 6.
In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use?	0.18x	In Stockhub's view, Peel Hunt closest peer(s) is Sova Assessment Limited.
Which financial forecasts to use?	Stockhub users	The only available forecasts are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so Stockhub suggests using those.
What's the current value of the company?	£127.11 million	The current valuation of Peel Hunt as of 27th December 2023 is £127.11 million.
Which time period do you want to use to estimate the expected return?	Between now and five years time	Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time.
Which valuation recommendation method do you want to use?	Relative	There's two main types of valuation recommendation methods, relative and absolute. The relative method determines the investment recommendation relative to other investments (e.g. the investment is "suitable" if it's within say the top 10% of the investment universe in terms of investment returns), whereas the absolute method determines the recommendation based on a fixed return amount (e.g. the investment is "suitable" if it returns 50% or more). Assuming sufficient data, the Stockhub users suggest using the relative method.
Which top proportion of the investment universe constitutes a "suitable" rating?	10%	The proportion depends on the user's preference. That said, typically, the higher the proportion, the higher the risk associated with the investment.
Which universe of investments do you want to use?	All investments	If the main objective of the user is to maximise investment returns, then the Stockhub users suggest using 'all investments' as the investment universe.

Sensitivity analysis

The main inputs that result in the greatest change in the expected return of the Peel Hunt investment are, in order of importance (from highest to lowest):

1. The growth-adjusted EV/sales multiple (the default multiple 0.18);
2. Peel Hunt Year 5 sales figure (the default figure is £48.74 million); and
3. Peel Hunt Year 6 sales growth rate (the default rate is 98.5%).

The impact of a 50% change in those main inputs to the expected return of the Peel Hunt investment is shown in the table below.

Peel Hunt investment expected return sensitivity analysis

Main input	50% worse	Unchanged	50% better
The growth-adjusted EV/sales multiple	ccc%	ccc%	ccc%
Peel Hunt Year 5 sales figure	ccc%	ccc%	ccc%
Peel Hunt Year 6 sales growth rate	ccc%	ccc%	ccc%

Share capital

Number of shares currently in issue: 122,807,085.

Shares not in public hands: 51.6%.

Significant shareholders (above 3% shareholding)

Institution	Registered holding of ordinary shares	% of total issued share capital
Darren Carter	10,189,585	8.3%
Gresham House Asset Management	8,093,809	6.6%
Steven Fine	5,577,351	4.5%
Peel Hunt Share Trust	5,528,728	4.5%
Unicorn Asset Management Limited	4,368,860	3.6%
Iain Morgan	4,206,689	3.4%
Canaccord Genuity Wealth (International) Limited	4,098,877	3.3%
Schroder Investment Management Limited	3,947,368	3.2%

The aggregate number of Ordinary Shares subject to lock-up in each of the second year following Admission: 33,346,520 Ordinary Shares.

The aggregate number of Ordinary Shares subject to lock-up in each of the third year following Admission: 21,932,985 Ordinary Shares.

The aggregate number of Ordinary Shares subject to lock-up in each of the fourth year following Admission: 10,858,688 Ordinary Shares.

Last updated on 10 August 2023.

Economic links to cash flow patterns

Economic links to cash flow patterns

Cash flow type	Introduction	Growth	Shake out	Mature	Decline
Operating	-	+	+/-	+	-
Investing	-	-	+/-	-	+
Financing	+	+	+/-	-	+/-

Beta risk profile

Beta value	Risk rating
0 to 0.50	Low
0.50 to 1.50	Medium
1.50 to 3.00	High
3.00 and above	Extremely high

Peel Hunt adjusted beta calculation

Date	iShares MSCI World ETF unit price (USD)	Peel Hunt share price (GBP)	iShares MSCI World ETF unit price change (%)	Peel Hunt share price change (%)
01/11/2018	86.21	N/A
01/12/2018	78.87	N/A	-8.51%	N/A
01/01/2019	84.96	N/A	7.72%	N/A
01/02/2019	87.49	N/A	2.98%	N/A
01/03/2019	88.79	N/A	1.49%	N/A
01/04/2019	92.09	N/A	3.72%	N/A
01/05/2019	86.76	N/A	-5.79%	N/A
01/06/2019	91.02	N/A	4.91%	N/A
01/07/2019	91.86	N/A	0.92%	N/A
01/08/2019	89.84	N/A	-2.20%	N/A
01/09/2019	91.78	N/A	2.16%	N/A
01/10/2019	94.12	N/A	2.55%	N/A
01/11/2019	96.76	N/A	2.80%	N/A
01/12/2019	98.78	N/A	2.09%	N/A
01/01/2020	97.73	N/A	-1.06%	N/A
01/02/2020	89.67	N/A	-8.25%	N/A
01/03/2020	77.93	N/A	-13.09%	N/A
01/04/2020	86.36	N/A	10.82%	N/A
01/05/2020	90.70	N/A	5.03%	N/A
01/06/2020	92.14	N/A	1.59%	N/A
01/07/2020	96.65	N/A	4.89%	N/A
01/08/2020	102.96	N/A	6.53%	N/A
01/09/2020	99.52	N/A	-3.34%	N/A
01/10/2020	96.53	N/A	-3.00%	N/A
01/11/2020	108.94	N/A	12.86%	N/A
01/12/2020	112.41	N/A	3.19%	N/A
01/01/2021	111.49	N/A	-0.82%	N/A
01/02/2021	114.27	N/A	2.49%	N/A
01/03/2021	118.49	N/A	3.69%	N/A
01/04/2021	123.61	N/A	4.32%	N/A
01/05/2021	125.60	N/A	1.61%	N/A
01/06/2021	126.57	N/A	0.77%	N/A
01/07/2021	128.83	N/A	1.79%	N/A
01/08/2021	132.02	N/A	2.48%	N/A
01/09/2021	126.46	N/A	-4.21%	N/A
01/10/2021	133.84	227.00	5.84%	N/A
01/11/2021	131.10	210.50	-2.05%	-7.27%
01/12/2021	135.32	201.00	3.22%	-4.51%
01/01/2022	128.32	175.00	-5.17%	-12.94%
01/02/2022	124.58	125.50	-2.91%	-28.29%
01/03/2022	128.16	124.00	2.87%	-1.20%
01/04/2022	117.42	121.50	-8.38%	-2.02%
01/05/2022	117.94	119.00	0.44%	-2.06%
01/06/2022	106.88	114.00	-9.38%	-4.20%
01/07/2022	115.57	103.50	8.13%	-9.21%
01/08/2022	110.28	101.00	-4.58%	-2.42%
01/09/2022	99.95	88.00	-9.37%	-12.87%
01/10/2022	107.42	85.50	7.47%	-2.84%
01/11/2022	115.44	83.00	7.47%	-2.92%
01/12/2022	109.25	85.00	-5.36%	2.41%
01/01/2023	117.01	107.00	7.10%	25.88%
01/02/2023	113.98	106.00	-2.59%	-0.93%
01/03/2023	117.67	106.00	3.24%	0.00%
01/04/2023	119.79	115.00	1.80%	8.49%
01/05/2023	118.60	104.50	-0.99%	-9.13%
01/06/2023	124.52	103.00	4.99%	-1.44%
01/07/2023	128.54	103.00	3.23%	0.00%
01/08/2023	125.70	102.50	-2.21%	-0.49%
01/09/2023	120.17	83.00	-4.40%	-19.02%
01/10/2023	117.11	80.00	-2.55%	-3.61%
24/10/2023	122.84	90.50	4.89%	13.13%

Peel Hunt beta and adjusted beta value

	Beta	Adjusted beta	Comment(s)
Consistent (monthly) intervals between data points	0.79	0.86	Here, when there is no valuation event, we have assumed that the share price is the same as the previous month, and, therefore, there has been no change in the share price. For example, there was no Peel Hunt valuation event in January 2022, so we have assumed that the valuation of Peel Hunt is the same in January 2022 as the previous month of December 2020, and, therefore, the share price change in January is 0%.

Cost of equity

Cost of equity (%)

Input	Input value	Additional information
Risk-free rate (%)	5.061%	Here, the risk free rate is the US 30 year treasury bond, and is calculated as at 26th October 2023. Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 50 years, so we have used the longest maturity, which is 30 years.
Beta	0.86	Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta.
Equity risk premium (%)	7.13%	Here, the equity risk premium is in relation to the global region, and is calculated as at 1st July 2023. Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium.
Cost of equity (%)	11.193%	Cost of equity = Risk-free rate + Beta x Equity risk premium.

Peel Hunt Nominated Advisors Clients

Peel Hunt in the nominated advisor to 28 companies that are listed on the AIM market of the London Stock Exchange (LSE) as at 26th December 2023.

Code	Name	Sector	Location	Market cap	Admission date
32ID	RENOLD PLC 6% CUM PRF STK GBP1	Industrial Engineering	North West	621,116	28/06/2002
ABDP	AB DYNAMICS PLC ORD 1P	Industrial Engineering	South West	415,112,007	22/05/2013
AET	AFENTRA PLC ORD 10P	Oil, Gas and Coal	International	76,468,598	23/12/2009
AFC	AFC ENERGY PLC ORD 0.1P	Alternative Energy	South East	144,326,910	24/04/2007
BOKU	BOKU, INC. CMN SHS USD0.0001 (DI) REG S CAT 3/144A	Industrial Support Services	International	409,724,748	20/11/2017
BRK	BROOKS MACDONALD GROUP PLC ORD 1P	Investment Banking and Brokerage Services	London	299,219,466	21/03/2006
CAML	CENTRAL ASIA METALS PLC ORD USD0.01	Industrial Metals and Mining	International	330,339,373	30/09/2010
CFX	COLEFAX GROUP PLC ORD 10P	Household Goods and Home Construction	London	44,814,823	24/03/2005
CRW	CRANEWARE PLC ORD 1P	Health Care Providers	Scotland	630,995,108	13/09/2007
CVSG	CVS GROUP PLC ORD 0.2P	Consumer Services	East Anglia	1,217,571,007	18/03/2008
FDEV	FRONTIER DEVELOPMENTS PLC ORD 0.5P	Leisure Goods	South West	53,296,022	15/07/2013
GDR	GENEDRIVE PLC ORD 1.5P	Pharmaceuticals and Biotechnology	North West	10,394,120	04/04/2007
GMR	GAMING REALMS PLC ORD 10P	Travel and Leisure	East Anglia	102,343,242	01/08/2013
HZM	HORIZONTE MINERALS PLC ORD 20P	Industrial Metals and Mining	International	21,177,644	31/05/2022
IDOX	IDOX PLC ORD 1P	Software and Computer Services	Scotland	310,206,020	19/12/2000
IPX	IMPAX ASSET MANAGEMENT GROUP PLC ORD 1P	Investment Banking and Brokerage Services	London	741,214,737	22/03/2006
IQE	IQE PLC ORD 1P	Technology Hardware and Equipment	Wales	230,763,498	30/09/2003
MANO	MANOLETE PARTNERS PLC ORD 0.4P	Investment Banking and Brokerage Services	London	72,206,153	14/12/2018
MPE	M. P. EVANS GROUP PLC ORD 10P	Food Producers	International	399,678,608	18/06/2007
NWF	NWF GROUP PLC ORD 25P	Industrial Support Services	North West	111,238,607	02/06/2000
PAF	PAN AFRICAN RESOURCES PLC ORD 1P	Precious Metals and Mining	London	319,672,865	14/09/2004
RNO	RENOLD PLC ORD 5P	Industrial Engineering	North West	80,248,715	19/12/2006
SPEC	INSPECS GROUP PLC ORD 1P	Personal Goods	International	85,404,081	27/02/2020
SQZ	SERICA ENERGY PLC ORD USD0.10	Oil, Gas and Coal	London	879,663,358	05/09/2006
STX	SHIELD THERAPEUTICS PLC ORD 1.5P	Pharmaceuticals and Biotechnology	Yorkshire & North East	50,442,636	26/02/2016
VANL	VAN ELLE HOLDINGS PLC ORD 2P	Construction and Materials	Midlands	40,027,850	26/10/2016
VLX	VOLEX PLC ORD 25P	Electronic and Electrical Equipment	South West	591,376,248	19/03/2001
WJG	WATKIN JONES PLC ORD 1P	Household Goods and Home Construction	Wales	146,940,838	23/03/2016

Peel Hunt is ranked 12th in terms of the number of AIM-listed companies to which it is a nominated advisor as at 26th December 2023.

Nominated advisor	Number of clients	Ranking based on clients number
Peel Hunt LLP	28	12
Numis Securities Limited	24	15
Cairn Financial Advisers LLP	21	16
SPARK Advisory Partners Limited	27	13
Cavendish Capital Markets Limited	105	1
Beaumont Cornish Limited	35	9
S P Angel Corporate Finance LLP	40	7
Singer Capital Markets Advisory LLP	52	4
Zeus Capital Limited	21	16
W H Ireland Limited	52	4
Cavendish Securities Plc	18	18
Allenby Capital Limited	55	3
Investec Bank Plc	27	13
Joh. Berenberg, Gossler & Co. KG	2	24
Strand Hanson Limited	59	2
Panmure Gordon (UK) Limited	29	11
Liberum Capital Limited	42	6
Stifel Nicolaus Europe Limited	17	19
Shore Capital & Corporate Limited	35	9
Grant Thornton UK LLP	11	20
Houlihan Lokey UK Limited	5	22
Canaccord Genuity Limited	40	7
Davy Corporate Finance	9	21
J.P. Morgan Securities plc	3	23

Sector	Number of clients	Ranking based on number of clients
Industrial Engineering	3	1
Oil, Gas and Coal	2	3
Alternative Energy	1	8
Industrial Support Services	2	3
Investment Banking and Brokerage Services	3	1
Industrial Metals and Mining	2	3
Household Goods and Home Construction	2	3
Health Care Providers	1	8
Consumer Services	1	8
Leisure Goods	1	8
Pharmaceuticals and Biotechnology	2	3
Travel and Leisure	1	8
Software and Computer Services	1	8
Technology Hardware and Equipment	1	8
Food Producers	1	8
Precious Metals and Mining	1	8
Personal Goods	1	8
Construction and Materials	1	8
Electronic and Electrical Equipment	1	8

Peel Hunt peer(s)

	Peel Hunt LLP	Numis Corporation plc	Panmure Gordon	Shore Capital	Goldman Sachs				Average (median)
Relative valuation data
Local currency	GBP	GBP	GBP	GBP	USD				N/A
Current market capitalisation (local currency, million)									N/A
Year ago sales									N/A
Current sales									N/A
Sales growth rate (%)									N/A
Current cash									N/A
Current debt									N/A
Relative valuation metrics
Enterprise value/sales
Growth-adjusted enterprise value/sales ratio
Absolute valuation data
Lifecycle growth stage	Stage 2 (of 4)	Stage 3 (of 4)	Stage 4 (of 4)	N/A	Stage 2 (of 4)
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Key metrics for different stages of the business lifecycle

	Stage 1	Stage 2	Stage 3	Stage 4
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Stage 2

	Peel Hunt			Median
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Stage 3

	Numis Corporation			Median
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Stage 4

	Blackberry	Panmure Gordon		Median
Cost of goods sold as a proportion of revenue (%)	36.13%			36.13%
Operating expenses as a proportion of revenue (%)	174.39%			174.39%
Tax rate (%)	(1.94)%			(1.94)%
Depreciation and amortisation rate (%)	47.29%			47.29%
Fixed Capital Investment (FCInv) as a proportion of revenue (%)	6.25%			6.25%
Working Capital Investment (WCInv) as a proportion of revenue (%)	2.13%			2.13%
Net borrowing as a proportion of revenue (%)	0%			0%
Interest expense as a proportion of revenue (%)	0%			0%

Numis Corporation plc

	30/09/2018	30/09/2019	30/09/2020	30/09/2021	30/09/2022
	Historic	Historic	Historic	Historic	Historic
Profit and loss
Revenue (£'million)				215,582	144,229
Other operating income/(loss)				8,715	(1,432)
Total income				224,297	142,797
Administrative expenses				(147,859)	(123,716)
Operating profit/(loss)				76,438	19,081
Finance income				1	3,906
Finance costs				(2,289)	(2,131)
Profit Before Tax				74,150	20,856
Taxation				(16,303)	(7,153)
Profit for the period				57,847	13,703
Balance sheet
Assets
Non-current assets
Property, plant and equipment				10,044	9,458
Intangible assets				558	275
Right-of-use assets				38,033	35,400
Deferred tax assets				4,006	1,354
				52,641	46,487
Current assets
Trade and other receivables				467,799	403,416
Trading investments				58,972	36,071
Stock borrowing collateral				18,623	20,354
Current income tax recievable				3,171	10,792
Derivative financial instruments				629	22
Cash and cash equivalents				134,125	105,653
Total current assets				683,319	576,309
Liabilities
Non-current liabilities
Lease liabilities				(39,580)	(40,910)
Current liabilities
Trade and other payables				(481,946)	(385,720)
Trading investments				(27,217)	(10,340)
Lease liabilities				(491)	(605)
Total current liabilities				(509,654)	(396,665)
Net assets				186,726	185,221
Equity
Share capital				6,252	5,718
Capital redemption reserve				0	534
Other reserves				9,037	10,641
Retained earnings				171,437	168,328
Total equity				186,726	185,221
Cash flow statement
Operating activities
Cash flows generated from operating activities				77,115	7,902
Taxation paid				(17,599)	(7,164)
Interest received in relation to operating activities				1	436
Interest paid in relation to operating activities				(1,187)	0
Net cash from/(used in) operating activities				58,330	1,174
Investing activities
Decrease in term deposits				0	0
Purchase of property, plant and equipment				(8,881)	(1,114)
Purchase of intangible assets				(310)	(19)
Proceeds on disposal of subsidiary				0	0
Proceeds/(purchase) on disposal of investments				0	0
Net cash from/(used in) investing activities				(9,191)	(1,133)
Financing activities
Purchase of own shares - Treasury				(1,555)	(8,183)
Purchase of own shares - Employee Benefit Trust				(22,663)	(3,385)
Cash paid in respect of lease arrangements - principal				(1,811)	(555)
Interest paid				(1,102)	(537)
Dividends paid				(12,726)	(15,580)
Net cash from/(used in) financing activities				(39,857)	(28,240)
Operating costs
Depreciation of owned plant and equipment and right-of-use assets
Amortisation of other intangible assets
Impairment of intangible assets
Marketing costs
Operating lease rentals payable – property
Office running costs – excluding operating lease rents payable
FSCS costs
Dealing and financial services costs
Data and technology costs
Legal and professional costs
Other operating costs
Staff (including contractors) costs
Total
Metrics
Cost of goods sold as a proportion of revenue (%)				N/A	N/A
Operating expenses as a proportion of revenue (%)				65.92%	86.64%
Tax rate (%)				21.99%	34.30%
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 (%)

Panmure Gordon Group Limited

	31/12/2018	31/12/2019	31/12/2020	31/12/2021	31/12/2022	30/09/2023	30/09/2024
	Historic	Historic	Historic	Historic	Historic	Forecast	Forecast
Profit and loss
Revenue (£'000)				48,286	27,637
Cost of sales				(1,882)	(1,704)
Gross profit				46,404	25,933
Operating expenses				(42,516)	(41,648)
Total operating (loss)/profit				3,888	(15,715)
Net interest expense				(119)	(870)
Profit before tax				3,769	(16,585)
Tax expense				56	(127)
(Loss)/profit on ordinarily activities before taxation				3,825	(16,712)
Discontinued operations				(720)	364
(Loss)/profit after taxation				3,105	(16,348)
Attributable to: equity holder of parent				3,105	(16,348)
Other comprehensive income net of income tax:
Debt instruments at fair value through other comprehensive income				2	22
Total comprehensive (loss)/profit for the year				3,107	(16,326)
Balance sheet
Assets
Non-current assets
Intangible assets				973	759
Goodwill				792	792
Property, plant and equipment				451	1,327
Deferred tax asset				174	63
Trade and other receivables				413	0
				2,803	2,941
Current assets
Securities held for trading				9,135	6,405
Financial investments				3,793	2,770
Trade and other receivables				84,202	36,200
Cash and cash equivalents				8,613	4,826
				105,743	50,201
Total assets				108,546	53,142
Liabilities
Current liabilities
Securities held for trading				(4,098)	(3,688)
Trade and other payables				(77,470)	(19,790)
Overdrafts				0	(15,535)
				(81,568)	(39,013)
Non-current liabilities
Deferred tax liability				(161)	(130)
Trade and other payables				0	(459)
Provisions				(274)	0
				(435)	(589)
Total liabilities				(82,003)	(39,602)
Net assets				26,543	13,540
Equity
Called up share capital				420	478
Share premium				78,524	81,936
Retained earnings				(52,401)	(68,874)
Total equity				26,543	13,540
Cash flow statement
Cash flows from operating activities
Profit for the financial year				3,769	(16,585)
Finance income				0	(32)
Finance costs				0	902
Foreign exchange on capitalised shareholders loan				0	313
Depreciation				870	965
Amortisation				691	225
Change in operating assets				(56,281)	50,800
Change in operating liabilities				44,840	(57,871)
Change in other non-cash items				384	28
Discontinued operations				(720)	0
Utilisation of provision				(533)	(97)
Tax paid				(52)	(181)
Net cash from/(used in) operating activities				(7,032)	(21,533)
Cash flows from investing activities
Acquisition of intangible assets and property, plant and equipment				(116)	(616)
Interest received				0	32
Sale of financial investments				485	1,367
Net cash from/(used in) investing activities				369	783
Cash flows from financing activities
Funds raised from shareholders				100	2,950
Overdrafts				0	15,535
Interest paid				0	(672)
Interest paid on lease liabilities				-	(23)
Lease repayments				(815)	(827)
Net cash from/(used in) financing activities				(715)	16,963
Net decrease in cash and cash equivalents				(7,378)	(3,787)
Cash and cash equivalents at the beginning of the year				15,991	8,613
Cash and cash equivalents at the end of the year				8,613	4,826
Metrics
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Share Capital Group plc

Year	1	2	3	4	5	6	7
Year end date	31/12/2016	31/12/2017	31/12/2018	31/12/2019	31/12/2020	31/12/2021	31/12/2022
	Historic	Historic	Historic	Historic	Historic	Historic	Historic
Profit and loss
Revenue						2,174	1,721
Administrative expenses						(7,971)	(2,495)
Profit from operations						(5,797)	(774)
Dividend income						2,800	0
Profit before tax						(2,997)	(774)
Tax credit						435	138
Profit for the year						(2,562)	(636)
Balance sheet
Assets
Non-current assets
Tangible assets						804	672
Investments in subsidiaries						35,784	35,784
						36,588	36,456
Current assets
Debtors: amounts due within one year						5,946	5,903
Cash at bank and in hand						1,443	462
						7,389	6,365
Total assets
Liabilities
Non-current liabilities
Creditors: amounts falling due after more than one year						(59)	(59)
Current liabilities
Creditors: amounts falling due within one year						(43,062)	(42,542)
Total liabilities
Net assets						856	220
Issued capital and reserves attributable to owners of the parent
Called up share capital						460	460
Share premium account						20,090	20,090
Revaluation reserve						5,596	5,596
Retained earnings						(25,290)	(25,926)
Total equity						856	220
Cash flow statement
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible fixed assets
Interest and other finance income
Interest and other finance expenses
Loss/(gain) on sale of property, plant and equipment
Foreign exchange gain/(loss) of revaluation of assets
Foreign exchange (loss)/gain on consolidation
Interest paid
Interest received
Income tax expense
Movements in working capital:
Decrease/(increase) in trade and other receivables
Increase in current asset investments
Increase in trade and other payables
Cash generated from operations
Income tax paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from disposal of property, plant and equipment
Net cash from/(used in) investing activities
Cash flows from financing activities
Finance lease payments
New finance leases
Loan repayments
Loans received
Net cash from/(used in) financing activities
Metrics
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Goldman Sachs

	31/12/2018	31/12/2019	31/12/2020	31/12/2021	31/12/2022
	Historic	Historic	Historic	Historic	Historic
Profit and loss
In millions, except per share amounts
Revenues
Investment banking			9,100	14,136	7,360
Investment management			6,986	8,171	9,005
Commissions and fees			3,539	3,590	4,034
Market making			15,428	15,357	18,634
Other principal transactions			4,756	11,615	654
Total non-interest revenues			39,809	52,869	39,687
Interest income			13,689	12,120	29,024
Interest expense			8,938	5,650	21,346
Net interest income			4,751	6,470	7,678
Total net revenues			44,560	59,339	47,365
Provision for credit losses			3,098	357	2,715
Operating expenses
Compensation and benefits			13,309	17,719	15,148
Transaction based			4,141	4,710	5,312
Market development			401	553	812
Communications and technology			1,347	1,573	1,808
Depreciation and amortization			1,902	2,015	2,455
Occupancy			960	981	1,026
Professional fees			1,306	1,648	1,887
Other expenses			5,617	2,739	2,716
Total operating expenses			28,983	31,938	31,164
Pre-tax earnings			12,479	27,044	13,486
Provision for taxes			3,020	5,409	2,225
Net earnings			9,459	21,635	11,261
Preferred stock dividends			544	484	497
Net earnings applicable to common shareholders			8,915	21,151	10,764
Balance sheet
$ in millions
Assets
Cash and cash equivalents				261,036	241,825
Collateralized agreements:
Securities purchased under agreements to resell (at fair value)				205,703	225,117
Securities borrowed (includes $38,578 and $39,955 at fair value)				178,771	189,041
Customer and other receivables (includes $25 and $42 at fair value)				160,673	135,448
Trading assets (at fair value and includes $40,143 and $68,208 pledged as collateral)				375,916	301,245
Investments (includes $78,201 and $83,427 at fair value, and $9,818 and $12,840 pledged as collateral)				88,719	130,629
Loans (net of allowance of $5,543 and $3,573, and includes $7,655 and $10,769 at fair value)				158,562	179,286
Other assets (includes $145 and $0 at fair value)				34,608	39,208
Total assets				1,463,988	1,441,799
Liabilities and shareholders’ equity
Deposits (includes $15,746 and $35,425 at fair value)				364,227	386,665
Collateralized financings:
Securities sold under agreements to repurchase (at fair value)				165,883	110,349
Securities loaned (includes $4,372 and $9,170 at fair value)				46,505	30,727
Other secured financings (includes $12,756 and $17,074 at fair value)				18,544	13,946
Customer and other payables				251,931	262,045
Trading liabilities (at fair value)				181,424	191,324
Unsecured short-term borrowings (includes $39,731 and $29,832 at fair value)				46,955	60,961
Unsecured long-term borrowings (includes $73,147 and $52,390 at fair value)				254,092	247,138
Other liabilities (includes $159 and $359 at fair value)				24,501	21,455
Total liabilities				1,354,062	1,324,610
Commitments, contingencies and guarantees
Shareholders’ equity
Preferred stock; aggregate liquidation preference of $10,703 and $10,703				10,703	10,703
Common stock; 917,815,030 and 906,430,314 shares issued, and 334,918,639 and 333,573,254 shares outstanding				9	9
Share-based awards				4,211	5,696
Nonvoting common stock; no shares issued and outstanding				–	–
Additional paid-in capital				56,396	59,050
Retained earnings				131,811	139,372
Accumulated other comprehensive loss				(2,068)	(3,010)
Stock held in treasury, at cost; 582,896,393 and 572,857,062 shares				(91,136)	(94,631)
Total shareholders’ equity				109,926	117,189
Total liabilities and shareholders’ equity				1,463,988	1,441,799
Cash flow statement
$ in millions
Cash flows from operating activities
Net earnings			9,459	21,635	11,261
Adjustments to reconcile net earnings to net cash provided by/(used for) operating activities
Depreciation and amortization			1,902	2,015	2,455
Deferred income taxes			(833)	5	(2,412)
Share-based compensation			1,920	2,348	4,083
Gain related to extinguishment of unsecured borrowings			(1)	–	–
Provision for credit losses			3,098	357	2,715
Changes in operating assets and liabilities:
Customer and other receivables and payables, net			(30,895)	21,971	35,014
Collateralized transactions (excluding other secured financings), net			(13,007)	(70,058)	(100,996)
Trading assets			(33,405)	15,232	45,278
Trading liabilities			44,892	26,616	8,062
Loans held for sale, net			1,820	(5,556)	3,161
Other, net			(3,485)	(8,267)	87
Net cash provided by/(used for) operating activities			(18,535)	6,298	8,708
Cash flows from investing activities
Purchase of property, leasehold improvements and equipment			(6,309)	(4,667)	(3,748)
Proceeds from sales of property, leasehold improvements and equipment			2,970	3,933	2,706
Net cash used for business acquisitions			(231)	–	(2,115)
Purchase of investments			(48,670)	(39,912)	(60,536)
Proceeds from sales and paydowns of investments			29,057	45,701	12,961
Loans (excluding loans held for sale), net			(11,173)	(35,520)	(25,228)
Net cash used for investing activities			(34,356)	(30,465)	(75,960)
Cash flows from financing activities
Unsecured short-term borrowings, net			7,707	2,137	321
Other secured financings (short-term), net			2,861	(1,320)	(2,283)
Proceeds from issuance of other secured financings (long-term)			8,073	4,795	1,800
Repayment of other secured financings (long-term), including the current portion			(4,137)	(6,590)	(3,407)
Purchase of Trust Preferred securities			(11)	–	–
Proceeds from issuance of unsecured long-term borrowings			47,250	92,717	84,522
Repayment of unsecured long-term borrowings, including the current portion			(55,040)	(52,608)	(42,806)
Derivative contracts with a financing element, net			1,037	1,121	1,797
Deposits, net			67,343	103,538	28,074
Preferred stock redemption			(350)	(2,675)	–
Common stock repurchased			(1,928)	(5,200)	(3,500)
Settlement of share-based awards in satisfaction of withholding tax requirements			(830)	(985)	(1,595)
Dividends and dividend equivalents paid on common stock, preferred stock and share-based awards			(2,336)	(2,725)	(3,682)
Proceeds from issuance of preferred stock, net of issuance costs			349	2,172	–
Other financing, net			392	361	361
Net cash provided by financing activities			70,380	134,738	59,602
Effect of exchange rate changes on cash and cash equivalents			4,807	(5,377)	(11,561)
Net increase/(decrease) in cash and cash equivalents			22,296	105,194	(19,211)
Cash and cash equivalents, beginning balance			133,546	155,842	261,036
Cash and cash equivalents, ending balance			155,842	261,036	241,825
Supplemental disclosures:
Cash payments for interest, net of capitalized interest			9,091	5,521	19,022
Cash payments for income taxes, net			2,754	6,195	4,555
Metrics
Cost of goods sold as a proportion of revenue (%)
Operating expenses as a proportion of revenue (%)
Tax rate (%)
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 (%)

Blackberry

	28/02/2019	28/02/2020	28/02/2021	28/02/2022	28/02/2023
	Historic	Historic	Historic	Historic	Historic
Profit and loss
Revenue			893	718	656
Cost of sales			250	251	237
Gross margin			643	467	419
Operating expenses
Research and development			215	219	207
Selling, marketing and administration			344	297	340
Amortization			182	165	96
Impairment of goodwill			594	0	245
Impairment of long-lived assets			43	0	235
Gain on sale of property, plant and equipment, net			0	0	(6)
Debentures fair value adjustment			372	(212)	(138)
Litigation settlement			0	0	165
			1,750	469	1,144
Operating loss			(1,107)	(2)	(725)
Investment income (loss), net			(6)	21	5
Income (loss) before income taxes			(1,113)	19	(720)
Provision for (recovery of) income taxes			(9)	7	14
Net income (loss)			(1,104)	12	(734)
Earnings (loss) per share
Basic			(1.97)	0.02	(1.27)
Diluted			(1.97)	(0.31)	(1.35)
Balance sheet
Assets
Current
Cash and cash equivalents				378	295
Short-term investments				334	131
Accounts receivable, net of allowance of $1 and $4, respectively				138	120
Other receivables				25	12
Income taxes receivable				9	3
Other current assets				159	182
				1,043	743
Restricted cash and cash equivalents				28	27
Long-term investments				30	34
Other long-term assets				9	8
Operating lease right-of-use assets, net				50	44
Property, plant and equipment, net				41	25
Goodwill				844	595
Intangible assets, net				522	203
				2,567	1,679
Liabilities
Current
Accounts payable				22	24
Accrued liabilities				157	143
Income taxes payable				11	20
Debentures				0	367
Deferred revenue, current				207	175
				397	729
Deferred revenue, non-current				37	40
Operating lease liabilities				66	52
Other long-term liabilities				4	1
Long-term debentures				507	0
				1,011	822
Commitments and contingencies
Shareholders' equity
Capital stock and additional paid-in capital
Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable				0	0
Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares
Issued and outstanding - 582,157,203 voting common shares (February 28, 2022 - 576,227,898)				2,869	2,909
Deficit				(1,294)	(2,028)
Accumulated other comprehensive loss				(19)	(24)
				1,556	857
				2,567	1,679
Cash flow statement
Cash flows from operating activities
Net income (loss)			(1,104)	12	(734)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Amortization			198	176	105
Stock-based compensation			44	36	34
Gain on sale of investment			0	(22)	0
Impairment of goodwill			594	0	245
Impairment of long-lived assets			43	0	235
Gain on sale of property, plant and equipment, net			0	0	(6)
Debentures fair value adjustment			372	(212)	(138)
Operating leases			(4)	(16)	(16)
Other			(5)	(3)	(5)
Net changes in working capital items
Accounts receivable, net of allowance			29	44	18
Other receivables			(11)	0	13
Income taxes receivable			(4)	1	6
Other assets			55	15	(1)
Accounts payable			(11)	2	2
Accrued liabilities			(20)	(16)	(11)
Income taxes payable			(15)	5	9
Deferred revenue			(79)	(50)	(29)
Net cash provided by (used in) operating activities			82	(28)	(263)
Cash flows from investing activities
Acquisition of long-term investments			(5)	(1)	(3)
Proceeds on sale, maturity or distribution from long-term investments			0	35	0
Acquisition of property, plant and equipment			(8)	(8)	(7)
Proceeds on sale of property, plant and equipment			0	0	17
Acquisition of intangible assets			(36)	(31)	(34)
Acquisition of short-term investments			(1,039)	(916)	(514)
Acquisition of restricted short-term investments			(24)	0	0
Proceeds on sale or maturity of restricted short-term investments			0	24	0
Proceeds on sale or maturity of short-term investments			1,047	1,104	717
Net cash provided by (used in) investing activities			(65)	207	176
Cash flows from financing activities
Issuance of common shares			19	10	6
Payment of finance lease liability			(1)	0	0
Repurchase of 3.75% Debentures			(610)	0	0
Issuance of 1.75% Debentures			365	0	0
Net cash provided by (used in) financing activities			(227)	10	6
Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents			2	(1)	(3)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period			(208)	188	(84)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period			426	218	406
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period			218	406	322
Metrics
Cost of goods sold as a proportion of revenue (%)			28.00%	34.96%	36.13%
Operating expenses as a proportion of revenue (%)			195.97%	65.32%	174.39%
Tax rate (%)			0.81%	36.84%	-1.94%
Depreciation and amortisation rate (%)				31.61%	47.29%
Fixed Capital Investment (FCInv) as a proportion of revenue (%)			4.93%	5.43%	6.25%
Working Capital Investment (WCInv) as a proportion of revenue (%)				89.97%	2.13%
Net borrowing as a proportion of revenue (%)				0%	0%
Interest expense as a proportion of revenue (%)				0%	0%

Investec

For the year to 31 March £’000	2021	2022	2023
Profit and loss
Interest income		1 951 209	3 397 341
Interest income calculated using the effective interest method		1 717 776	2 890 776
Other interest income		233 433	506 565
Interest expense		(1 005 939)	(2 101 584)
Net interest income		945 270	1 295 757
Fee and commission income		864 639	832 213
Fee and commission expense		(46 423)	(52 860)
Investment (loss)/income		27 974	(17 145)
Share of post-taxation profit of associates and joint venture holdings		79 556	29 149
Trading income/(loss) arising from
– customer flow		128 277	131 204
– balance sheet management and other trading activities		(21 128)	57 714
Other operating income		12 190	4 386
Total operating income before expected credit loss impairment charges		1,990,355	2,280,418
Expected credit loss impairment charges		(28,828)	(81,089)
Operating income		1,961,527	2,199,329
Operating costs		(1,233,948)	(1,350,835)
Operating profit before goodwill, acquired intangibles and strategic actions		727,579	848,494
Impairment of goodwill		(1,962)	(890)
Amortisation of acquired intangibles		(15,477)	(15,160)
Amortisation of acquired intangibles of associates		(9,249)	(1,542)
Closure and rundown of the Hong Kong direct investments business		(1,203)	(450)
Operating profit		699,688	830,452
Net gain/(implementation costs) on distribution of associate to shareholders		(2,427)	154,438
Financial impact of Group restructures		—	(4,968)
Profit before taxation		697,261	979,922
Taxation on operating profit before goodwill, acquired intangibles and strategic actions		(143,309)	(179,704)
Taxation on acquired intangibles and strategic actions		2,422	17,213
Profit after taxation		556 374	817 431
Profit attributable to non-controlling interests		(40 170)	(12 566)
Earnings attributable to shareholders		516 204	804 865
Earnings attributable to ordinary shareholders		475 469	764 446
Earnings attributable to perpetual preferred securities and other Additional Tier 1 security
holders		40 735	40 419
Balance sheet
Assets
Cash and balances at central banks	3 517 100	5 998 270	6 437 709
Loans and advances to banks	2 637 436	2 552 061	1 450 627
Non-sovereign and non-bank cash placements	439 841	684 983	644 065
Reverse repurchase agreements and cash collateral on securities borrowed	3 575 713	4 609 778	3 632 658
Sovereign debt securities	3 711 623	4 148 867	4 751 646
Bank debt securities	1 121 730	1 515 210	939 509
Other debt securities	1 364 235	1 229 287	1 229 392
Derivative financial instruments	1 683 214	1 590 513	1 386 134
Securities arising from trading activities	1 024 671	683 329	1 632 391
Investment portfolio	909 050	912 872	1 330 907
Loans and advances to customers	26 041 087	29 561 088	29 911 158
Own originated loans and advances to customers securitised	401 912	375 763	272 879
Other loans and advances	102 135	128 284	142 726
Other securitised assets	140 087	123 888	103 151
Interests in associated undertakings and joint venture holdings	679 157	734 434	53 703
Current taxation assets	60 325	33 653	69 322
Deferred taxation assets	246 622	259 370	258 126
Other assets	2 237 646	2 139 354	1 581 693
Property and equipment	329 972	335 420	278 561
Investment properties	832 061	820 555	722 481
Goodwill	259 805	258 404	262 632
Software	58 968	9 443	15 401
Other acquired intangible assets	12 574	44 152	41 136
Non-current assets classified as held for sale	51 783	79 229	35 761
	51 438 747	58 828 207	57 183 768
Other financial instruments at fair value through profit or loss in respect
of liabilities to customers	52 405	59 549	110 891
	51 491 152	58 887 756	57 294 659
Liabilities
Deposits by banks	2 403 712	3 178 668	3 617 524
Derivative financial instruments	2 231 166	2 581 315	2 424 036
Other trading liabilities	326 189	275 589	202 256
Repurchase agreements and cash collateral on securities lent	1 003 312	863 285	936 564
Customer accounts (deposits)	34 449 430	40 118 412	39 555 669
Debt securities in issue	1 892 319	2 043 640	1 802 586
Liabilities arising on securitisation of own originated loans and advances	160 646	238 370	163 787
Liabilities arising on securitisation of other assets	108 281	95 885	81 609
Current taxation liabilities	78 790	41 631	83 183
Deferred taxation liabilities	40 333	19 624	26 545
Other liabilities	1 951 122	2 315 841	1 873 714
Liabilities to customers under investment contracts	44 645 300 49 798	51 772 260 56 475	50 767 473 108 370
Insurance liabilities, including unit-linked liabilities	2 607	3 074	2 521
Subordinated liabilities	44 697 705 1 480 951 46 178 656 247 1 517 852 (267 508) (788 222) 3 772 628	51 831 809 1 316 191   53 148 000       247 1 516 024 (318 987) (650 228) 4 069 776	50 878 364 1 084 630
			51 962 994
Equity
Ordinary share capital			247
Ordinary share premium			1 208 161
Treasury shares			(564 678)
Other reserves			(850 742)
Retained income			4 553 011
Ordinary shareholders’ equity	4 234 997	4 616 832	4 345 999
Perpetual preference share capital and premium	174 053	174 869	136 259
Shareholders’ equity excluding non-controlling interests	4 409 050	4 791 701	4 482 258
Other Additional Tier 1 securities in issue	335 111	411 683	398 568
Non-controlling interests	568 335	536 372	450 839
– Perpetual preferred securities issued by subsidiaries	72 750	—	—
– Non-controlling interests in partially held subsidiaries	495 585	536 372	450 839
Total equity	5 312 496	5 739 756	5 331 665
Total liabilities and equity	51 491 152	58 887 756	57 294 659
Cash flow statement
Cash inflow from operating activities
Profit before taxation adjusted for non-cash, non-operating items and other required
adjustments		816 404	1 009 019
Taxation paid		(152 140)	(171 292)
Increase in operating assets		(3 321 970)	(2 710 850)
Increase in operating liabilities		5 729 246	2 342 880
Net cash inflow from operating activities		3 071 540	469 757
Cash flows from investing activities
Cash flow on acquisition of Group operations, net of cash acquired		—	(9 720)
Cash inflow on disposal of Group operations		14 274	12
Derecognition of cash on disposal of subsidiaries		(4 152)	—
Cash outflow on acquisition of associates and joint venture holdings		(8 780)	—
Cash flow on disposal of associates and joint venture holdings		39 222	565
Cash flow on acquisition of property, equipment, software and other intangible assets		(9 323)	(30 337)
Cash flow on disposal of property, equipment, software and other intangible assets		4 324	25 487
Net cash (outflow)/inflow from investing activities		35 565	(13 993)
Cash flows from financing activities
Dividends paid to ordinary shareholders		(178 418)	(260 673)
Dividends paid to other equity holders		(83 524)	(71 268)
Acquisition of non-controlling interest		443	118
Repurchase of perpetual preference shares		(77 835)	(19 379)
Proceeds on issue of other Additional Tier 1 securities in issue		67 552	22 787
Repayment of other Additional Tier 1 securities in issue		—	(15 951)
Cash flow on acquisition of treasury shares, net of related costs		(71 836)	(262 248)
Share buyback of ordinary share capital		(36 150)	(56 863)
Proceeds on subordinated liabilities raised		421 506	460 934
Repayment of subordinated liabilities		(583 918)	(665 648)
Lease liabilities paid		(45 743)	(46 493)
Net cash outflow from financing activities		(587 923)	(914 684)
Effects of exchange rates on cash and cash equivalents		90 928	(196 806)
Net (decrease)/increase in cash and cash equivalents		2 610 110	(655 726)
Cash and cash equivalents at the beginning of the year		6 489 630	9 099 740
Cash and cash equivalents at the end of the year		9 099 740	8 444 014
Cash and cash equivalents is defined as including:
Cash and balances at central banks		5 998 270	6 437 709
On demand loans and advances to banks		2 414 562	1 359 689
Non-sovereign and non-bank cash placements		684 983	644 065
Expected credit loss on cash and cash equivalents		1 925	2 551
Cash and cash equivalents at the end of the year		9 099 740	8 444 014