Cavendish, the merged capital markets group comprising the former finnCap and Cenkos investment banks, highlighted a resurgence in deal activity in its full-year results published on Monday.
In a joint statement signed by co-chief executives Julian Morse and John Farrugia, Cavendish noted that, in the nine months since the £42 million merger, it executed over 120 transactions worth £2.5 billion across all divisions.
To put this into context, finnCap executed 52 transactions valued at £1.1 billion in the full financial year preceding the merger, while Cenkos brokered deals with £520 million.
It shows a healthy rebound in post-merger deal activity for the combined group, but while revenues marched 46% higher to £48 million on a combined basis in the last financial year (“reflecting the increase in scale of the equity capital markets business following the merger”), administration costs cut deeply into profits.
Employee costs comprised 73% of total revenues, with Cavendish attributing this to bonuses awarded “for people's contributions to our strong post-merger performance”.
As a result of spiralling costs, Cavendish posted an operating loss of £3.9 million.
Nonetheless, Cavendish decided to reinstate a full-year dividend, albeit as a much-reduced 0.25p compared to 1.15p paid out by finnCap in financial 2023.
Cavendish cancelled its first-half dividend in December 2023, stating that “we will consider dividend payments with the full year results”, pending post-merger performance.
Overall, Cavendish’s results failed to impress, with the stock slipping over 10% in Monday trades.