Cavendish plc (LON:CAV) has delivered a steady full-year performance against a difficult backdrop for UK smaller companies, according to the latest research note from Hardman & Co.
The research note, written by Research Analyst Jason Streets, highlights Cavendish’s ability to remain profitable while continuing to invest in its people, technology and regional presence. For the year ended 31 March 2026, Cavendish reported revenue of £56.9m, up 2.3% from £55.6m in FY25. Reported profit before tax doubled to £1.5m, compared with £0.7m in the prior year. Core profit before tax, which strips out items including share-based payments, option revaluation movements, associate and joint venture losses, and non-recurring costs, was £3.5m, compared with £3.7m in FY25.
Jason Streets described the business in encouraging terms, writing: “Cavendish – the product of the 2023 merger of finnCap and Cenkos – is a well-balanced business with M&A capability and capital raising in both public and private markets.”
That balance is central to the investment case outlined by Hardman & Co. Cavendish is a UK investment bank focused on smaller companies, generally those with a market capitalisation below £1bn. It provides capital raising, corporate advice, M&A support, equity and debt advisory services across public and private markets.
Despite ongoing pressure on UK smaller companies, including fund outflows and a reduction in the number of quoted companies, the note points to signs of resilience. Cavendish’s Securities revenue rose strongly to £9.4m from £5.7m, a 66% increase, supported by equities trading activity and investment in the trading platform. This helped offset modest declines in retainer and transaction revenue.
FY26 highlights
- Revenue increased 2.3% to £56.9m, from £55.6m in FY25.
- Reported profit before tax doubled to £1.5m, from £0.7m.
- Core profit before tax was £3.5m, compared with £3.7m in FY25.
- Securities revenue rose 66% to £9.4m.
- Investment Banking revenue was £47.4m, compared with £50.0m in FY25.
- Cavendish completed 96 transactions during the year.
- The proposed final dividend was held at 0.5p, with total DPS at 0.80p.
- The company ended March 2026 with £19.2m of cash and no debt on the balance sheet.
The latest research note from Hardman & Co also highlights Cavendish’s efforts to build a more resilient revenue mix. Recurring revenues and trading income increased to 35% of group revenue, compared with 31% in FY25. This reflects management’s focus on broadening the business and reducing reliance on any one part of the market.
Cost control was another important theme. Administrative expenses increased only slightly to £55.3m, while non-employee costs reduced on a like-for-like basis. Cavendish also continued to invest selectively, including senior hires in Equity Research, Institutional Sales, Trading and Corporate Broking, as well as regional expansion in Manchester and Birmingham.
The regional private markets teams became profitable in the latter part of the year, which Hardman & Co described as an important milestone for the company’s expansion strategy. Cavendish is also investing in data analytics and applied AI, using technology to support origination, advisory work, execution, pricing discipline and client insight.
Looking ahead, Hardman & Co’s FY27 forecast for Cavendish Plc remains broadly unchanged, with expected revenue of £60.0m and profit before tax of £3.6m. The broker’s central DCF-derived valuation is £59m, equivalent to 15.6p per share, with a valuation range of £57m to £92m. At the time of the note, the market capitalisation was £35m and the share price was 9.0p.
While the report is clear that the health of UK capital markets remains the key risk, it also points to possible signs of improvement. A net increase of ten quoted clients in the second half of FY26 was noted as a positive indicator, while the company’s strong balance sheet, diversified income streams and continued profitability provide support as markets remain challenging.
Final Thoughts, Cavendish plc has delivered a measured and resilient FY26 performance in difficult market conditions. The note from Hardman & Co presents a business that is profitable, cash-rich, debt-free and investing for future growth, while maintaining a disciplined approach to costs and dividends.
