City investment bank Cavendish has ditched its co-chief executive structure in an operations overhaul following the bank sliding into the red for the first half of the year.
The Aim-listed group made a pre-tax loss of near £500k in the six months to September, reversing a £1m profit made in the same period last year.
Revenue fell 20 per cent to £22.9m, while deal fees tumbled to £12.4m. Private market transactions dropped 44 per cent and public 25 per cent.
The bank introduced plans to cut annual costs by £3m over the next six months through restructuring and IT efficiencies. Around £2m of the savings are expected to come from employee changes.
It kicked off the overhaul through moving to a single chief executive structure. Julian Morse, who was appointed joint chief in 2023, will remain as the firm’s only top boss. Former co-chief executive John Farrugia will step down from his role and the board.
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SUBSCRIBE HERECavendish also scrapped its interim dividend following the slowdown in a bid to preserve capital. It follows a 0.3p payout in the same period last year.
Aim’s slowdown hit Cavendish
“Despite the slow start to the year with pressure on all businesses resulting from significant geopolitical and economic headwinds, we are increasingly seeing good prospects being generated from several areas of targeted investment in the prior periods,” Julian Morse, chief executive of Cavendish, said.
He said the group had a “healthy pipeline” of public and private transactions including “potential IPOs” for the next 12 months.
The firm, which specialises in deals on London’s junior stock market Aim, said the UK public markets had been “subdued” for the first six months.
“Aim continued to experience low levels of new issuance and relatively weak secondary-market liquidity, reflecting persistent economic uncertainty constraining institutional demand,” the bank’s report said.
It added UK equities remained “dominated” by the US-Iran conflict and supply disruption triggered by the Strait of Hormuz.
The Bank of England raised interest rates for the first time since 2023 last week in response to new inflationary pressures following the conflict.
“The prospective monetary tightening and its likely impact on growth have weighed particularly on UK small and mid-caps,” Cavendish said.