Cavendish PLC (AIM:CAV), the UK investment bank focused on small and mid-cap companies, reported a return to profitability in the past year amid the green shoots of recovery in the small-cap market.
Revenues were just above flat on a like-for-like basis at £55.6 million in the year to March 2025, with cash balances also rising modestly to £21.2 million.
Adjusted profit before tax reached £3.7 million, swinging from a £1.8 million loss the previous year, while statutory profit before tax was £0.7 million compared to a £4.3 million loss.
More than 100 transactions, totally roughly £2.7 billion, were completed during the year as Cavendish expanded its footprint with new offices in Manchester and Birmingham and continued to invest in client-facing roles and cut non-employee costs 16%.
Cavendish maintained its position as a leading broker and adviser to AIM-quoted companies, winning 21 new quoted clients, completing 70 transactions, and accounting for over 60% of UK IPO capital raised in the past six months.
Co-chief executives Julian Morse and John Farrugia said the firm had been "consistently profitable" during the year, has a "healthy" balance sheet and an "exciting" pipeline of transactions.
The company declared a total dividend of 0.8p per share, up from 0.25p, which the pair said reflects the performance last year and confidence in the future.
"The accelerated build out of our data analytics capability is beginning to transform how we originate, advise and execute. This investment goes beyond efficiency and embeds intelligence at the core of how we deliver value, supporting our vision of combining human judgement with data-led insight."
They acknowledged a 55% drop in public M&A revenues due to market conditions but said this was largely offset by a 23% rise in equity issuance, which provides higher quality, more sustainable revenue. "Though average fees fell 13% due to the shift, increased equity activity supports longer-term growth," they added.
Cavendish has completed two IPOs in the new financial year, alongside a growing and profitable trading book.
Looking ahead, the co-CEOs said: "We have started the new financial year well. The M&A market and pipeline remain strong, supported by rising numbers of entrepreneurs exploring exits and increased private equity activity as firms seek to realise value across their portfolios."
They noted active relationships with about 150 UK private equity firms deploying over £50 billion in committed capital, including 20 firms that raised £7 billion in the past 18 months in sectors aligned with Cavendish’s focus.