Cavendish (LON: CAV) announced this morning that it expects revenue of about £22.8m for the six months to the 30th of September. The UK investment bank, which advises on and raises capital through M&A, equity capital markets and trading, pointed to increased macroeconomic challenges.
The half-year trading update gave no prior-year revenue figure, no profit, no dividend and no results date. Nothing in it lets a reader say whether revenue is higher or lower than a year earlier.
What it does give is the shape of the business. Cavendish says revenue remains balanced across public and private M&A, ECM and trading. ECM is equity capital markets, meaning share issues and IPOs.
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The bank has also been active in the London Stock Exchange’s new Private Securities Market, a venue for trading private-company shares. The deals it named were Veremark, Moneybox, Wayve and Oxford Science Enterprises.
Cavendish says it has kept its market-leading position, supporting the largest number of AIM-quoted companies, and has continued to raise the average market capitalisation of its retained clients. It also reports a noticeable step up in new private M&A and private growth capital mandates, which it credits to investment in origination capability.
On the outlook, the company struck a cautious but constructive note:
Despite challenging conditions in the year to date, we are increasingly seeing good prospects being generated from several areas of targeted investment in the prior periods, including our business outside London.
Cavendish plc company statement
Cavendish describes the pipeline of public and private transactions, including IPOs, as healthy. The catch is timing: it says completion timetables, meaning when deals close and revenue is booked, “remain difficult to predict”, and with them revenue visibility.
That unpredictability is why the company says it will “continue to exercise strict cost controls”. For now the £22.8m is the only number on the table, and it arrives without a yardstick.
