One of the City’s newest investment banks, Cavendish, has warned of “short-term uncertainty” over the Autumn Budget as financial markets brace for expected take hikes.
Cavendish, which was formed by the £43m merger of Cenkos and Finncap last September, called for Chancellor Rachel Reeves to introduce “more incentive for investment in small and medium-sized UK companies, not less” on 30 October.
The firm added that it had been working with its clients “to plan for any adjustments which could be needed”.
Investors are nervously awaiting potential shake-ups in Labour’s first Budget since winning the general election. The government is widely expected to hike taxes to address an alleged £22bn “black hole” in the public finances.
“Despite this short-term uncertainty, we remain focused on our core objective which is to build on the strong foundations we have already established to develop Cavendish into the leading full-service investment bank for growth companies,” Cavendish said.
Cavendish reported the update in a trading update. The investment bank reported a profitable six months to the end of September 2024, although it did not disclose the size of the profit.
In July, Cavendish revealed an operating loss of £3.9m for the year ended 30 March 2024, compared to a £1.9m loss in the previous year.
“Our profitable first half, in both public and private markets, demonstrates the broad appeal of our service offering and the efficiency of our platform”, the firm said on Monday.
Cavendish said it expected group revenue for the six months to be at least £27.5m, which would be up 41 per cent from £19.5m on a like-for-like basis compared to a year before.
The firm said its cash balances were up 40 per cent year on year at £17.2m as of 30 September, providing “financial resilience for the group”.
The company also said: “We have a solid pipeline of both public and private transactions in train, including a number of potential IPOs and ongoing public M&A activity.”
“We have increased our share in the public markets in terms of the number of AIM clients (rank first) and by adding clients on the Official List to meet our ambition of increasing the average market capitalisation of our client base.”