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Cenkos posts jump in profit but cautious on outlook
Stockbroker Cenkos Securities posted a surge in full-year profit on Friday but sounded a cautious note on its outlook.
In the year to the end of December 2017, profit before tax on continuing operations rose 97% to £10m on revenue of £59.5m, up 36% on the previous year. Basic earnings per share were 154% higher at 15p and the company lifted its full-year dividend by 50% to 9p per share.
Cenkos said corporate finance and placing fees generated across the firm were underpinned by several large deals during the year, as it helped its clients to raise £2.5bn of equity finance, up from £1.3bn in 2016. The group said its corporate client base remains solid, reflecting its "ethos of building and maintaining long-term relationships".
Notable deals completed during the year included the IPO of Eddie Stobart Logistics, raising £393m, the secondary raisings of £302m for Civitas Social Housing, £408m for Hurricane Energy and £150m for Smart Metering Systems.
However, the outlook wasn't so rosy, with Cenkos pointing out that the Brexit vote creates uncertainty for both the UK's financial industry and the wider markets.
Chief executive Anthony Hotson said: "We live in an uncertain geopolitical environment that makes it very difficult to predict either the direction of the markets or health of investor sentiment. There has been significant market volatility leading to a correction in all main global indices.
"This market volatility does appear to have had an impact on investor sentiment with a pause in the momentum the Firm experienced in the second half of 2017. Despite this, we remain ranked as one of the leading brokers in London for growth companies, institutional investor appetite to fund high quality companies is likely to return and our business model is resilient. Consequently, we look forward to the future with cautious optimism."
At 1115 GMT, the shares were down 7.2% to 109.10p.