(Alliance News) - finnCap Group PLC on Wednesday said profit in the first half of its financial year more than doubled amid increased equity fundraising from clients.
Shares in finnCap were up 12% at 21.80 pence in London in afternoon trading.
The London-based stockbroker reported a GBP3.6 million pretax profit for the six months ended September 30, more than twice the GBP1.4 million profit reported in the prior year.
This came as revenue jumped 44% to GBP20.5 million from GBP14.2 million.
finnCap explained: "Against our initial expectations, activity in our markets in H1 has been strong, with increased equity fundraisings to support our clients' financial needs and investment in strong business cases. We have also benefited from on-going long-term investment in building leading expertise in the healthcare, biotech and tech sectors where there has been significant corporate activity.
"As a result, revenue generation in H1 has proven to be stronger than we expected and, with cost actions outlined above, we have therefore delivered materially higher profits and cashflow than in H1 last year."
The firm raised more than GBP300 million across 15 equity fundraisings for listed clients, plus 2 initial public offerings. It also advised on 4 completed takeovers and public company advisory roles worth GBP212 million total.
finnCap said its financial third quarter has started well with the completion of the Fonix Mobile PLC IPO, which raised GBP45 million, as well as a GBP87 million placing and open offer for Synairgen PLC. It is expecting "a good result" for financial 20201, which ends March 31, "well ahead of the prior year". finnCap also expects its disposal of a 70% holding in PrimaryBid Ltd, for approximately GBP700,000, to complete in early 2021.
Jon Moulton, finnCap's chief executive officer, it to retire at the end of December, succeeded by Robert Lister. Lister, who joins finnCap January 1, "spent 25 years in investment banking first with Barclays de Zoete Wedd where he started as a graduate in 1983 and rose to become head of European Equities in 1998 and then at Dresdner Kleinwort Benson where he was global head of Equities."
Howard Leigh will step down from the board, becoming senior partner of newly integrated Corporate Finance (UK) Ltd.
Chief Executive Sam Smith said: "Our strategy of developing a full suite of products for growth companies - which, we believe, differentiates us from our peers - is delivering incremental revenue. Having completed the integration of Cavendish, we are now moving into a key phase of our strategy - 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.
"The uncertain operating environment means we must remain cautious, however, Q3 has started well, with the completion of the IPO of Fonix Mobile and a further large fund raising for Synairgen and our pipeline of deals remains good."
The company declared a 0.5 pence per share interim dividend, having ceased dividend payments in financial 2020.
Additionally, finnCap noted its chief financial officer, Richard Snow, bought 95,364 shares at 22.65 pence each, worth GBP21,600, on Wednesday. Snow now is interested in 328,697 shares, a 0.2% stake.
By Anna Farley; annafarley@alliancenews.com
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