Numis Corporation — Investing to broaden the income base

Numis Corporation (LSE: NUM)

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GBP3.43

0.00 (0.00%)

Market capitalisation

GBP402m

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Research: Financials

Numis Corporation — Investing to broaden the income base

Inevitably, after two years of record revenues and with near-term market sentiment less certain, there is a temptation to be wary of the outlook for an investment bank. However, Numis has proven resilient through market cycles, has a strong balance sheet and has been successfully pursuing a growth strategy, which includes broadening its activities into M&A advisory, private markets and now international equity capital markets. Market fluctuations are still set to sway earnings but, on a longer view, the steps being taken currently should provide the base for further growth.

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Financials

Numis Corporation

Investing to broaden the income base

FY21 results update

Financial services

10 December 2021

Price

319p

Market cap

£354m

Net cash (£m) at end September 2021

134.1

Shares in issue

111.1m

Free float

75%

Code

NUM

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(3.6)

(11.4)

(8.9)

Rel (local)

(3.9)

(13.8)

(19.1)

52-week high/low

398p

308.5p

Business description

Numis Corporation is one of the UK's leading independent investment banking groups, offering a full range of research, execution, equity capital markets, corporate broking and advisory services. At the end of September 2021 it employed 319 staff in offices in London, Dublin and New York, and had 182 corporate clients.

Next events

AGM

8 February 2022

Analysts

Andrew Mitchell

+44 (0)20 3681 2500

Martyn King

+44 (0)20 3077 5745

Numis Corporation is a research client of Edison Investment Research Limited

Inevitably, after two years of record revenues and with near-term market sentiment less certain, there is a temptation to be wary of the outlook for an investment bank. However, Numis has proven resilient through market cycles, has a strong balance sheet and has been successfully pursuing a growth strategy, which includes broadening its activities into M&A advisory, private markets and now international equity capital markets. Market fluctuations are still set to sway earnings but, on a longer view, the steps being taken currently should provide the base for further growth.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

09/19

111.6

12.4

8.1

12.0

39.3

3.8

09/20

154.9

37.1

26.7

12.0

11.9

3.8

09/21

215.6

74.2

49.1

13.5

6.5

4.2

09/22e

181.4

44.3

30.2

13.5

10.5

4.2

Note: *PBT and EPS are on a reported basis and EPS is fully diluted.

FY21 results: Record revenue and dividend increase

In line with its Q421 update at the end of September, Numis had a strong second half, with revenue just 9% below the exceptionally high level seen in its first half. Full year revenue of £215.6m (+39.2% y-o-y) represented a new record and included investment banking revenue up 52% and equities up 14%. Despite investment in staff to support growth, underlying operating profit increased 80%, demonstrating operational gearing. Further boosted by gains on the investment portfolio (£8.7m), pre-tax profit was up 100% to £74.2m. This gave diluted EPS of 49.1p (+84%). In an indication of the board’s confidence in the capacity of the business to generate returns through market cycles, its ability to support investment and the adequacy of its capital and liquidity positions, the dividend has been rebased to 13.5p for the full year (previously 12p).

Strong pipeline with near-term timing uncertainty

Looking ahead, Numis has a strong pipeline of deals and reports that the UK M&A and global private markets areas remain active. There is currently more uncertainty over the timing of execution of IPOs and other capital markets transactions. As well as developing its core business further, Numis looks to expand its newer UK M&A and private market areas further and to develop international equity capital markets activities on a targeted basis.

Valuation

Apart from adjusting the dividend expectation in line with the increase announced for FY21, our FY22 estimate is not changed materially. It allows for some normalisation in earnings after two very strong years and gives a prospective P/E of 10.5x, below the averages for the US/EU investment banks and advisory firms. A ROE/COE model suggests the current share price is implying an ROE of 15.3%, below the five- or 10-year historical averages, for example (see page 7).

FY21 results analysis

Exhibit 1 provides a summary of the half- and full-year figures for FY20 and FY21 with additional comments noted below. Figures are compared with the prior year period unless stated.

Group revenue for FY21 was up 39% with the largest increase (+£53m) in investment banking. Within this, capital markets and advisory were the main contributors, reflecting the revival in IPO and M&A activity following a COVID-induced hiatus, growth in the private markets activity (the Growth Capital Solutions team within capital markets) and a significant increase in average deal fees earned by Numis (these have doubled since FY19). Higher average deal fees were generated by larger deal sizes and more senior positions in transactions, an indication of a strengthening in Numis’s reputation. The larger deal size in part reflects the increase in quality of the retained client base; while Numis does not regard size alone as an indicator of client quality, the average market capitalisation of its retained corporate clients has increased to £1.4bn, an increase of 88% over five years, and includes 66 FTSE 350 companies. The year-end number of retained clients at 182 versus 188 was affected by acquisitions of clients and a post-pandemic reduction in the opportunities to pitch for new clients. This left corporate retainer income slightly lower, but higher M&A activity contributed to a 177% (£19.7m) increase in advisory revenue arising from work for both retained and non-retained clients. Not shown in the table below, but private markets transaction revenue accounted for more than £20m or 18% of capital markets revenue and, as with the advisory team, there has been recruitment to support the increased level of activity and potential for growth.

Within the equities business, institutional income benefited from market share gains, with the number of institutional clients increasing despite post-Brexit limitations on access to EU clients. The new electronic trading product has progressed and is expected to account for a growing proportion of institutional income. Research income was at a similar level to the prior year and Numis believes the market has now generally stabilised following the implementation of MiFID II in 2018. Trading income was up 23% from a strong FY20 with a weighting to the first half. The net trading gains of nearly £20m compare with the £9m average of the prior five years, reflecting periodic volatility during the year (although below the levels seen in FY20), a relatively strong performance by mid- and small-cap stocks and an increase in trading book limits.

The other operating income line comprised gains of £8.7m in the investment portfolio, which was valued at £21.8m at the year end (versus £14.7m FY20). The gains mainly arose from holdings in Oxford Nanopore Technologies (DNA/RNA sequencing devices) and Wiz Inc (cyber security). Numis invested in Oxford Nanopore Technologies 12 years ago and acted for the company in its IPO at the end of September; Numis has since sold its entire holding. The investment in Wiz was made during FY21 and is an example of a move to later-stage investments that are aligned with its private market activity and can benefit from Numis’s network and experience. Remaining legacy and fund investments are being progressively sold, with the aim being to have a broadly stable number of holdings through reinvestment.

Administrative expenses increased by 25%, including a 26% increase in total staff costs (or 30% excluding share-based payments) mainly reflecting higher variable remuneration given the increase in pre-bonus profitability. The year-end headcount was 9% higher at 319 and the average increased by 3.5%. Staff additions mainly comprised junior and mid-level roles in investment banking. At 50.4%, the compensation ratio was at the lower end of the target range of 50–60%. Non-staff costs increased by 21% including higher occupancy costs arising from the move to a new London office (there was a reduced one-off cost of £0.4m related to this compared with £1.3m in FY20). Data service costs rose with headcount and there were professional fees relating to the EU licence application for the Dublin office. Ongoing non-staff costs for this office are expected to be £1.5m.

This left operating profits more than double the FY20 level and the operating margin, before other income at 31.4% versus 23.6%. Pre-tax profit increased by 100% and diluted EPS by 84%.

Exhibit 1: Profit and loss analysis

£m unless stated

H120

H220

H121

H221

% change y-o-y

FY20

FY21

% change y-o-y

Net trading gains

6.5

9.5

11.5

8.2

(12.8)

16.0

19.8

23

Institutional income

19.7

17.5

21.9

19.1

9.0

37.2

41.0

10

Equities

26.2

27.0

33.4

27.3

1.3

53.2

60.7

14

Corporate retainers

6.8

6.7

6.3

6.2

(8.1)

13.5

12.5

(8)

Advisory

7.2

3.9

12.4

18.5

370.7

11.1

30.9

177

Capital markets

22.8

54.2

63.3

48.2

(11.1)

77.0

111.5

45

Investment banking

36.9

64.8

82.0

72.8

12.3

101.7

154.9

52

Total revenue

63.1

91.8

115.4

100.2

9.1

154.9

215.6

39

Other operating income

(1.9)

2.2

2.0

6.7

204.5

0.3

8.7

2,711

Total income

61.2

94.0

117.4

106.9

13.7

155.2

224.3

45

Staff costs

(36.6)

(49.4)

(61.0)

(47.6)

(3.6)

(86.0)

(108.6)

26

Non-staff costs

(17.4)

(15.0)

(15.7)

(23.6)

56.8

(32.4)

(39.2)

21

Total administrative expenses

(54.0)

(64.4)

(76.7)

(71.2)

10.5

(118.4)

(147.9)

25

Operating profit/loss

7.2

29.6

40.7

35.7

20.7

36.8

76.4

108

Finance income/expense

0.0

0.2

(1.4)

(0.9)

(472.1)

0.3

(2.3)

(970)

Pre-tax profit

7.3

29.8

39.3

34.8

16.8

37.1

74.2

100

Tax

(1.0)

(4.7)

(9.5)

(6.8)

43.4

(5.7)

(16.3)

185

Effective tax rate (%)

13.8

15.8

24.3

19.4

15.4

22.0

43

Attributable profit

6.3

25.1

29.8

28.1

11.8

31.4

57.8

85

Diluted EPS (p)

5.5

20.7

25.7

23.5

13.6

26.7

49.1

84

Dividend (p)

5.5

6.5

5.5

8.0

23.1

12.0

13.5

13

Operating margin before other income (%)

14.5

29.8

33.6

28.9

23.6

31.4

33

Source: Numis, Edison Investment Research

Numis had maintained a stable full-year dividend at 12p since FY16, but has made an upward adjustment to 13.5p (8p final dividend) for FY21. The move follows a reassessment by the board, which took into account resilience shown by the business through market cycles and the progress in implementation of the group’s strategy in FY21 and prior years. The board sees the increase as consistent with investing to support growth.

The group remains committed to returning excess cash to shareholders and mitigating the dilutive impact of share awards. During FY21, on-market purchases of shares were sharply reduced (£1.6m versus £5.4m) as the purchase of shares for the employee benefit trust increased (to £22.7m versus £4.3m), which was related to the vesting of FY16 Long Term Incentive Plan (LTIP) awards. This vesting pushed up the share count at the year end and the group intends to increase on-market buybacks of shares to prior levels to offset the dilutive effect over a period.

The group adheres to its five strategic strands while evolving as openings emerge.

1.

Build the size and quality of the corporate franchise. This underpins transaction opportunities for the capital markets and advisory teams.

2.

Become the leading UK equities platform by growing market share in both equities and equity capital markets.

3.

Diversify into new products and markets. Here the aim is to increase advisory and private markets revenues further. The potential to develop non-UK equity capital markets revenues has been recognised and targeted more recently. Numis has been acting as an adviser on its first US IPO (Nubank, a Brazilian fintech, listed on the NYSE). Investment in Dublin and the US will help attract non-UK clients and facilitate a broadening of the institutional investor client base.

4.

Maintain operating and capital discipline. While costs have increased with growth and the move to a new London office, the compensation ratio has been managed through market fluctuations.

5.

Deliver shareholder returns through revenue growth, with greater diversity of income and control over the share count resulting in EPS growth and lower volatility through the market cycle.

Background and outlook

Exhibits 2 and 3 show calendar-year figures for total issuance for the London Stock Exchange Main and AIM markets since 2007; the 2021 figures are for the period to end-November. On the Main Market, the number of new issues for 2021 to end November was sharply higher than in 2020 but total money raised was below the prior year period when funds were being raised to support company balance sheets following the onset of the pandemic. For AIM, the pattern has been different with a smaller increase in 2020 issuance followed by a rise in 2021 as the market rotated towards smaller- and mid-cap stocks with growing confidence in economic recovery. Like the Main Market, AIM new issues have increased significantly from a low point in 2019. Mirroring this, Numis acted for clients in 12 IPOs in FY21 compared with one in FY20.

To provide longer-term context, the level of money raised on the Main Market in 2020 and 2021 was well below the exceptional levels seen during the global financial crisis when large financial institutions on the Main Market required recapitalisation. In the case of AIM, issuance has been running well below the immediate pre-financial-crises level (£16bn in 2007).

Exhibit 2: LSE Main Market issuance and IPO count

Exhibit 3: LSE AIM issuance and IPO count

Source: London Stock Exchange. Note: 2021 to end November.

Source: London Stock Exchange. Note: 2021 to end November.

Exhibit 2: LSE Main Market issuance and IPO count

Source: London Stock Exchange. Note: 2021 to end November.

Exhibit 3: LSE AIM issuance and IPO count

Source: London Stock Exchange. Note: 2021 to end November.

Exhibit 4 illustrates the recent performance of UK equity indices. The strong recovery from the pandemic-induced fall last year is clear, with a more marked pick-up for smaller-cap stocks evident since late 2020 as noted above. Both indices have seen a softer performance more recently. The next chart shows the daily value traded on the London Stock Exchange order book and on AIM. The Main Market showed a sharp spike with the onset of the pandemic, but AIM activity following later as interest rotated towards smaller-cap or risker stocks. Both have seen a more recent decline towards more normal levels.

Exhibit 4: UK equity indices

Exhibit 5: LSE average daily value traded (£m)

Source: Refinitiv, CBOE indices

Source: London Stock Exchange (Main Market order book & AIM)

Exhibit 4: UK equity indices

Source: Refinitiv, CBOE indices

Exhibit 5: LSE average daily value traded (£m)

Source: London Stock Exchange (Main Market order book & AIM)

Turning to Numis’s performance in the first two months of FY22, the company reports that revenue was broadly in line with H221 (c £13.7m per month). Exhibit 6 shows selected transactions that made a contribution, demonstrating a continuation of activity with roles on four IPOs (including one on Nasdaq Stockholm). Nevertheless, Numis acknowledges that market uncertainties could have an impact on the timing of execution of the capital markets pipeline in H122.

Exhibit 6: Numis – selected transactions in H122 to date

Company

Date

Role

Transaction

Money raised/
value (£m)

Synthomer

Oct-21

Joint bookrunner

Placing

205

Arrow Global

Oct-21

Joint financial adviser and joint broker

M&A

563

Oxford Nanopore

Oct-21

Joint bookrunner

IPO

603

Eurowag

Oct-21

Joint bookrunner

IPO

c 1,000

XPS Pensions

Nov-21

Debt adviser

Refinancing

100

Truecaller

Nov-21

Joint bookrunner

IPO (Nasdaq Stockholm)

1,630

Hyve

Nov-21

Sole bookrunner and debt adviser

Placing

29

Ashtead Technology

Nov-21

Sole bookrunner and nomad

IPO

129

Stock Spirits

Nov-21

Joint financial adviser

M&A

767

Benchmark Holdings

Nov-21

Sole bookrunner

Placing

21

Source: Numis, Edison Investment Research

There is greater confidence over the activity level in the UK M&A and global private markets, both areas where Numis also sees good potential for longer-term growth following the progress already demonstrated in the FY21 results.

We discuss our estimate assumptions and outputs in the next section.

Financials

We have reviewed our FY22 estimates and made only modest adjustments. Our assumptions for FY22 are tentative at this early stage in the year, and this point is underlined by Numis’s caution over the timing for potential IPOs and other capital markets transactions in the pipeline. We have allowed for some normalisation in activity levels compared with FY21 on the basis that there may well be a quieter phase in activity. Nevertheless, the revenue run rate for the first two months (only) would, if maintained, imply a lower outcome with revenue of c £165m versus our £181m estimate (see Exhibit 7 for analysis).

Exhibit 7: Revenue analysis

£000s

2018

2019

2020

2021

2022e

Net trading gains

9,594

4,008

16,003

19,754

14,250

Institutional income

37,866

33,317

37,192

40,957

38,000

Equities

47,460

37,325

53,195

60,711

52,250

Corporate retainers

12,430

13,357

13,536

12,471

12,690

Advisory

17,335

12,576

11,146

30,884

31,500

Capital markets

58,822

48,352

77,022

111,516

85,000

Investment banking

88,587

74,285

101,704

154,871

129,190

Total revenue

136,047

111,610

154,899

215,582

181,440

Source: Edison Investment Research

On expenses, we have allowed for a further increase in staff numbers in FY22 to support growth in the new Dublin office, in advisory, the private markets team and in the US. Some double running costs will drop out in FY22 following the recent move to the new headquarters, but other non-staff costs will be higher, including costs related to the Dublin office, the new London office and higher travel and entertainment spending following the end of lockdown restrictions.

Changes in the headline numbers from our forecasts are shown below, with further detail from the new forecast given in the financial summary table (Exhibit 11). As can be seen, EPS increases marginally and the only material change in our FY22 estimates is adjusting the dividend to the new level set for FY21.

Exhibit 8: Estimate changes

Revenue (£m)

PBT (£m)

Fully diluted EPS (p)

DPS (p)

Old

New

Change

Old

New

Change

Old

New

Change

Old

New

Change

09/21a/e

215.2

215.6

0.2%

66.4

74.2

11.6%

44.9

49.1

9.3%

12.0

13.5

12.5%

09/22e

181.4

181.4

0.0%

44.2

44.3

0.1%

29.8

30.2

1.6%

12.0

13.5

12.5%

Source: Edison Investment Research. Note: For FY21, old figures are our estimate and new are actual.

Numis ended the year with no debt drawn and end-September cash and cash equivalents of £134.1m compared with £125.2m at the end of FY21. The average level of cash during the year was £115m versus £83m and the variance between daily high and low cash positions was £77m. The group also continues to have significant excess capital for regulatory purposes, which it regards as providing long-term stability and strategic flexibility. Numis notes that the UK Investment Firms Prudential Regime (IFPR) will take effect from the beginning of calendar 2022 and that its capital requirement under the new regulation will be subject to an FCA review of the internal assessment so there will be no immediate impact. The establishment of a regulated entity in Ireland and the addition of US ECM to the US office’s offering will give rise to a modest increase in capital requirement.

Turning to cash flow, there was a net cash inflow from operations of £58m including a negative working capital movement of £14m. Capital spending absorbed nearly £9m, a sharp increase on the previous five-year average of under £1m because of the fit-out costs of the new London office. Share repurchases and dividend payments absorbed £37m and, with other smaller items accounting for another £3m, in total there was a net cash inflow of £9m.

Valuation

We have updated our peer comparison table showing UK investment banks/brokers, and US and European investment banks and advisory firms in Exhibit 9.

Exhibit 9: Peer comparison

Price
(local)

Market cap
(£m)

Last reported
P/E (x)

Current P/E
(x)

Yield
(%)

ROE
(%)

Price to book
(x)

UK brokers

Numis

319

354

6.5

10.5

4.2

34.0

1.9

Cenkos

76

43

22.8

N/A

4.6

8.0

1.5

FinnCap

32

57

7.2

7.4

4.7

31.0

2.0

WH Ireland

50

31

13.3

N/A

0.0

7.6

2.0

UK brokers average

12.5

9.0

3.4

20.1

1.8

US, European IB and advisory

Bank of America

44.2

361,409

23.6

12.6

1.6

6.8

1.5

Evercore

136.7

6,090

14.2

9.3

1.7

43.8

4.5

Goldman Sachs

397.3

133,020

16.1

6.6

1.3

10.2

1.4

Greenhill

18.2

336

13.4

10.9

1.1

N/A

N/A

Jefferies Financial

38.6

9,474

14.6

6.4

1.5

8.1

1.0

JP Morgan

160.7

474,941

18.1

10.7

2.2

12.0

2.0

Moelis

61.7

4,062

21.2

11.3

2.3

N/A

7.5

Morgan Stanley

101.3

181,684

15.4

12.9

1.4

13.3

2.0

PJT Partners

74.0

2,630

15.0

16.0

0.3

N/A

11.4

Stifel Financial

71.8

7,522

15.7

10.7

0.6

N/A

2.0

Credit Suisse

8.9

23,671

8.4

25.7

1.1

5.9

0.5

Deutsche Bank

11.0

22,780

16.5

9.1

0.0

2.6

0.4

UBS

18.0

66,622

10.1

8.7

0.9

11.5

1.1

US, European IB and advisory average

15.6

11.6

1.2

12.7

2.9

Source: Refinitiv. Note: Priced at 9 December 2021. P/Es are for financial years and therefore not all same period end.

Comparison is limited by the fact that most other UK companies lack consensus estimates and that there are different year ends across the peers. Nevertheless, we note that Numis offers a high yield relative to the non-UK companies, its P/E ratios are below the averages for the US/EU investment banks and advisory firms and its ROE is high in the range.

The chart below shows a 10-year history of the price to book ratio for Numis. The current value is 1.9x, just below the 10-year average of 2.1x. Using an ROE/COE model to infer the ROE required to match the share price at time of writing (319p) gives a value of 15.3%: less than half the 34% reported in FY21 and also below the 21% five-year historical average, the 18% 10-year average and our FY22 estimate, also 18%. While the market may be taking a cautious view, given the very strong performance seen in the last two years and near-term uncertainties, it can be argued that the strategic progress the group has made is not being fully captured in this valuation.

Exhibit 10: 10-year history of the price to book value ratio for Numis

Source: Refinitiv, Edison Investment Research

Exhibit 11: Financial summary

£'000s

2016

2017

2018

2019

2020

2021

2022e

Year end 30 September

PROFIT & LOSS

Revenue

 

 

112,335

130,095

136,047

111,610

154,899

215,582

181,440

Administrative expenses (excl. amortisation and depreciation)

(76,120)

(83,626)

(94,603)

(85,432)

(105,327)

(133,651)

(124,010)

Share based payment

(6,229)

(10,454)

(10,583)

(10,914)

(9,961)

(9,634)

(7,000)

EBITDA

 

 

29,986

36,015

30,861

15,264

39,611

72,297

50,430

Depreciation

 

 

(1,126)

(1,226)

(1,113)

(1,124)

(3,016)

(4,416)

(5,020)

Amortisation

(125)

(89)

(49)

(44)

(105)

(158)

(70)

Operating profit (before other operating income)

 

 

28,735

34,700

29,699

14,096

36,490

67,723

45,340

Net finance income

37

188

212

550

263

(2,288)

(1,050)

Other operating income

3,759

3,431

1,733

(2,210)

310

8,715

0

Profit before tax

 

 

32,531

38,319

31,644

12,436

37,063

74,150

44,290

Tax

(6,132)

(7,942)

(4,967)

(3,110)

(5,713)

(16,303)

(8,415)

Profit after tax (FRS 3)

 

 

26,399

30,377

26,677

9,326

31,350

57,847

35,875

Average diluted number of shares outstanding (m)

118.0

117.2

115.8

114.9

117.3

117.7

118.6

EPS - basic (p)

23.5

27.4

25.1

8.8

29.9

54.2

32.7

EPS - diluted (p)

 

 

22.4

25.9

23.0

8.1

26.7

49.1

30.2

Dividend per share (p)

12.00

12.00

12.00

12.00

12.00

13.50

13.50

NAV per share (p)

113.5

125.0

135.0

131.3

149.8

168.3

184.1

ROE (%)

22%

23%

19%

6.6%

21.2%

33.6%

18.5%

EBITDA margin (%)

26.7%

27.7%

22.7%

13.7%

25.6%

33.5%

27.8%

Operating margin (%)

25.6%

26.7%

21.8%

12.6%

23.6%

31.4%

25.0%

BALANCE SHEET

Fixed assets

 

 

5,522

6,147

8,215

6,832

12,639

52,641

47,905

Current assets

 

 

312,462

407,850

533,033

326,641

509,034

683,319

700,785

Total assets

 

 

317,984

413,997

541,248

333,473

521,673

735,960

748,690

Current liabilities

 

 

(188,895)

(280,371)

(398,112)

(195,319)

(361,397)

(509,654)

(509,654)

Long term liabilities

(12)

0

0

0

(2,643)

(39,580)

(37,376)

Net assets

 

 

129,077

133,626

143,136

138,154

157,633

186,726

201,660

CASH FLOW

Operating cash flow

 

 

48,735

43,369

45,830

(2,748)

65,953

58,329

51,001

Net cash from investing activities

84

(198)

(1,014)

(77)

(474)

(9,190)

(3,390)

Net cash from (used in) financing

(19,580)

(36,359)

(29,035)

(24,646)

(24,451)

(39,857)

(30,145)

Net cash flow

 

 

29,239

6,812

15,781

(27,471)

41,028

9,282

17,466

Opening net (cash)/debt

 

 

(59,591)

(89,002)

(95,852)

(111,673)

(84,202)

(125,217)

(134,125)

FX effect

 

 

172

38

40

0

(13)

(374)

0

Closing net (cash)/debt

 

 

(89,002)

(95,852)

(111,673)

(84,202)

(125,217)

(134,125)

(151,591)

Source: Company data, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Numis Corporation and prepared and issued by Edison, in consideration of a fee payable by Numis Corporation. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Numis Corporation and prepared and issued by Edison, in consideration of a fee payable by Numis Corporation. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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