Cenkos nears three-year low as AIM fundraisings stall

First-half sales and profits cratered at small and mid-cap broker Cenkos Securities as several larger client fundraisings slipped into the second half, sending the shares below 100p for the first time in almost three years.

Revenue of £15.3m in the first six months of the year were down 71% on the same period last year, as 2015's results benefited from £26.7m of revenue from one large fundraising transaction that did not reoccur this year.

Excluding this, 2016's revenues fell 42% on the back of a lower number of fundraisings, while numbers of corporate clients fell to 119 from 125 a year ago.

Pre-tax profits of £1.7m were down 91% year-on-year, with earnings per share crashing 95% to 1.2p and the interim dividend slashed to 1p from last year's 7p.

Cenkos raised a total of £529m for clients in the half, which meant it was the number-two broker in terms of numbers of AIM clients and top of the list for oil and gas, industrials and consumer services sectors.

"Our successful strategy of being a leading UK institutional broker to growth companies and investment funds has led to us being profitable in every year since our formation in 2005 and this continued into the first half of 2016 in spite of very difficult market conditions which meant a number of significant fundraisings slipped into the second half of 2016," said chief executive Jim Durkin.

Rightly claiming to be one of the leading London brokers for growth companies, having raised more than £15bn of equity capital for clients in the 11 years since formation, Durkin said that Cenkos was "well-placed" to benefit from a market upturn and had made "a good start to the second half of the year".

He said: "There is institutional demand to fund high quality companies and ideas and since July we have been engaged in relation to a number of significant fundraisings and our current pipeline is encouraging."

Since July, a period that has included the formal opening of a Singapore office, Cenkos has been engaged on "a number of significant fundraisings" and said, with continuing institutional demand to fund high quality companies and ideas, it has an "encouraging" pipeline for the rest of the year.

Shares in the company fell 14.5% to 98.32p, their lowest level since October 2013.