2nd Oct 2020 10:16
(Alliance News) - Cenkos Securities PLC on Friday said it swung to profit in the first half of 2020 with increased corporate activity among clients during the Covid-19 pandemic.
Shares in Cenkos were up 2.6% at 46.15 pence in London in morning trading.
The London-based broker posted a GBP590,000 pretax profit for the six months ended June 30, swinging from a GBP201,000 loss a year before.
This stemmed from a 22% rise in revenue to GBP12.9 million from GBP10.6 million, as clients were driven to raise funds to cope with the pandemic and its associated lockdown measures or, conversely, to take advantage of new opportunities it presented.
"Swift action and our flexible operating model meant we have been fully operational throughout this time and therefore able to focus on our clients' needs and assist them through this period. Indeed, the second quarter of 2020 saw a further increase in corporate activity, such that secondary funds raised on AIM were more than double that raised in the first quarter," Chief Executive Jim Durkin noted.
Corporate finance fees rose 48% to GBP9.2 million as corporate activity increased, with companies raising funds to shore up balance sheets amid the economic downturn. Cenkos's focus on growth companies also meant that clients were raising funds for acquisitions and expansion.
However, Cenkos halved its interim dividend to 1.0p per share from 2.0p per share.
Durkin said: "Since the end of the period, we have completed several equity fundraisings for our clients. Although our current pipeline is encouraging and we continue to win new clients, we recognise that the prevalence of both the virus and measures taken to contain it, pose a continuing risk to the health of the economy and the financial markets.
"The restructuring programme started in 2019, has resulted in a significantly lower cost base going forward which, combined with the strength of Cenkos balance sheet and a rejuvenated strategic focus, means the company is well placed to face the challenges ahead. The second half of the current financial year has begun with energy and purpose at Cenkos, despite the ongoing macro challenges presented by the ongoing coronavirus."
By Anna Farley; [email protected]
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