Good morning!

There's a huge supply of announcements today. I have a dental appointment this afternoon but will come back and write a little more afterwards.

The list ended like this:

Sorry for not getting around to Cloudcall (LON:CALL), but I think Paul is the expert in this share. He will be back later in the week. Perhaps he will have a chance to review it for us then.

Thanks!

Graham




Cenkos Securities (LON:CNKS)

  • Share price: 92p (-7%)
  • No. of shares: 55 million
  • Market cap: £51 million

Interim Results

A few words on this Nomad/broker as it is one I have some familiarity with.

These are very poor results as profits have collapsed almost to nothing (£0.3 million).

But it is still profitable, although only just.

What I find impressive about Cenkos is that it has never made a loss  in 13 years of history as public company.

This is due to compensation plans which very heavily reward results, and then are flexible to dry up when results deteriorate.

For example, in this H1 period, revenues collapsed by 38%. It's not a stretch to imagine that most businesses would suffer a loss if their revenues fell by 38% compared to the prior period.

Demonstrating the flexibility of employee pay, staff costs also fell in the period, by 32.5%. The banker bonuses were significantly reduced.

Drilling into the revenue streams, I see that every single one of Cenkos' activities saw reduced sales this period.

The largest revenue stream also saw the largest percentage fall: corporate finance fees are down 44%. This is a feast-and-famine type of business. It heavily depends on market conditions and on the earning power of the company's top investment bankers.

Nomad/broking fees were about flat, research fees were down 12% thanks to MiFID II, and execution fees were down 43% due to exceptional gains made last year.

Like most investment banks, the research and execution…

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