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finnCap surges as it reports record half-year, appoints new chairman

For the six months to September 30, the broker reported a pre-tax profit of £3.6mln, up 166% year-on-year, while revenues jumped 44% to £20.5mln

finnCap Group Plc - finnCap reports record half-year, appoints new chairman

finnCap Group PLC (LON:FCAP) has reported a surge in profits and a record performance for its first half which has provided it with the confidence to resume dividend payments.

For the six months to September 30, the AIM-listed broker and corporate finance house reported a pre-tax profit of £3.6mln, up 166% year-on-year, while revenues jumped 44% to £20.5mln. Revenues were boosted by a 53% rise in deal and advisory fees to £14.2mln, while the company said its client base was stable at 125.

READ: finnCap to resume dividends as fundraising remains buoyant

The company declared an interim dividend of 0.5p per share, saying payments could resume after the better performance during the half-year “substantially strengthened” its balance sheet.

Looking ahead, the company said trading in its third quarter has “started well” with the completion of an initial public offering (IPO) of Fonix Mobile PLC (LON:FNX) raising £45mln and an £87mln placing and open offer for Synairgen PLC (LON:SNG), as well as a “good pipeline” in both equity capital markets and mergers & acquisitions for the remainder of the second half.

As a result, finnCap said it expects a “good result” for the full year, well ahead of the prior year.

"In an unprecedented period, our team has delivered a great result for our first half, with revenue up over 40%, and a record half year for finnCap. COVID-19 related cost control action and higher revenues have boosted profit and substantially strengthened our balance sheet and this has given the board the confidence to resume dividend payments today”, finnCap chief executive Sam Smith said in a statement.

The CEO added that the company is “carefully seeking bolt on acquisitions in adjacent sectors which align with our culture and further our vision of building a more broadly-based group, focused on servicing growing companies' needs”.

New chairman to be appointed

In a separate announcement, finnCap said it will appoint Robert Lister as its chairman on January 1, 2021, replacing current chair Jon Moulton who will retire from the role on December 31 after eleven years at the company.

Lister previously spent 25 years in investment banking, first with Barclays de Zoete Wedd where he rose to become head of European equities in 1998, and then at Dresdner Kleinwort Benson where he was global head of equities. He is also a non-executive director at Investec Walth and Investment Limited and Integrafin Holdings PLC (LON:IHP) among others.

"Jon has been an enormous asset for finnCap and to me personally as a CEO. I have enjoyed his support, guidance and challenge throughout the eleven years we have worked together creating finnCap. After a thorough external recruitment process, I am delighted that Robert will be joining us. He brings a wealth of commercial and financial experience and will broaden the Board's expertise and insight in the sectors in which we operate", CEO Smith said.

The company also said Lord Leigh of Hurley has decided to step down from the board and return to a front-line relationship and revenue generation role as senior partner of Cavendish Corporate Finance, which was recently integrated into finnCap.

The company's shares surged 15.4% to 22.5p in early trading on Wednesday.

--Adds share price--

Quick facts: finnCap Group PLC

Price: 31.5 GBX

AIM:FCAP
Market: AIM
Market Cap: £54.72 m
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