18th Sep 2019 10:38
(Alliance News) - Cenkos Securities PLC on Wednesday reported an interim loss, sinking from profit a year before, as the stockbroker announced its head of equity capital markets and natural resources will step down from the board but remain in their executive roles.
Shares in the stockbroker were 17% higher in London in mid-morning trade at 52.00 pence each.
In the six months to June 30, Cenkos sunk to a pretax loss of GBP196,000 compared to a GBP464,000 profit the year before.
The stockbroker's revenue declined 41% to GBP10.6 million from GBP18.1 million a year before. Cenkos's total fee & commission income slipped 39% to GBP9.7 million. The stockbroker's Corporate Finance and Research income declined 48% and 39%, respectively. Nomad & Broking income was broadly flat.
Cenkos recorded net trading gains of GBP900,000 in the first half, down 57% on the year before.
"As a result of the weak first half, revenue for the full year may be below that recorded in 2018; however the second half has started well with a number of transactions completed including an IPO," said Chief Executive Officer Jim Durkin.
Durkin continued: "This means Cenkos has completed two of only seven IPO's whose shares were admitted to trading on the AIM market in the period to August 2019, which demonstrates that Cenkos remains the leading AIM broker, raising money even in very difficult market conditions."
The stockbroker's administrative expenses cut by 38% to GBP10.9 million due to a 50% drop in staff costs as the company reduced its headcount.
Cenkos kept its interim dividend unchanged at 2.0 pence.
"Pipeline for the remainder of the year and for 2020 is encouraging. We continue to evolve our business to adapt to market changes and remain at the forefront in providing capital and solutions for growth companies," added CEO Durkin.
Separately, the stockbroker announced Paul Hodges and Joe Nally are stepping down from the company's board immediately.
Hodges, who runs Cenkos' equity capital markets team, and Nally, head of natural resources, will remain in place at Cenkos and as members of the company executive committee. The stockbroker said the move brings it into line with regulatory practices, with a resulting smaller board with a majority of non-executives.
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