Cavendish Reports Steady Full-Year Results Amid Market Uncertainty

Cavendish has delivered a fairly solid set of full-year results for the year to 31 March 2026. This is not a blow-the-doors-off update, but it is a credible one. Revenue edged higher, statutory profit improved, the business stayed debt free, and the dividend was held – all while UK small-cap markets remained choppy.

The catch is that not everything moved in the right direction. Core profit before tax slipped, earnings per share fell, cash came down, and private markets fees were weaker because larger deals did not land. So the message here is steady progress rather than breakout growth.

Cavendish FY26 results at a glance: revenue up, profits mixed, dividend held

Metric	FY26	FY25	Change
Revenue	£56.9 million	£55.6 million	+2.2%
Core profit before tax	£3.5 million	£3.7 million	-5.4%
Profit before taxation	£1.5 million	£0.7 million	Up strongly
Basic EPS	0.16p	0.23p	Down
Year-end cash	£19.2 million	£21.2 million	-9.5%
Total dividend	0.8p	0.8p	Unchanged
Transaction volume	96	100	-4.0%

One useful point here is Cavendish’s use of “core” measures. Core profit before tax and core earnings per share strip out items like share-based payments, option revaluation movements and the share of associate and joint venture profits or losses. In plain English, management is trying to show the trading performance of the underlying business without some of the accounting noise.

Why Cavendish revenue growth matters more than it first appears

Revenue rose to £56.9 million from £55.7 million, which on the face of it looks modest. But given the backdrop – political uncertainty, inflation concerns, interest rate noise and a pretty unloved UK small and mid-cap market – that is actually respectable. Plenty of market-facing businesses would have taken flat revenue and called it a decent year.

What makes this more interesting is where the growth came from. Securities revenue jumped 66.0% to £9.4 million from £5.7 million, while public markets revenue rose 10.9% to £41.4 million. That suggests Cavendish is becoming less dependent on one single fee stream, which is exactly what you want from an advisory business in patchy markets.

Recurring revenues and trading income also increased to 35% of group revenue from 31% last year. That matters because recurring income is usually more reliable than chunky deal fees, which can be feast or famine.

Core profit slipped, and that is the main niggle in these Cavendish results

The less cheerful bit is profitability. Core profit before tax dipped to £3.5 million from £3.7 million, and core EPS fell to 0.80p from 0.94p. Basic EPS also dropped to 0.16p from 0.23p.

Management says this was mainly due to deliberate investment in regional expansion, talent and technology. That is a fair explanation, and it is believable given employee benefit expense rose to £40.5 million from £38.4 million and the compensation ratio moved up to 66% from 64%.

My take is that this is acceptable, but only up to a point. If those investments improve mandate flow, deepen client relationships and raise productivity, investors will look through near-term margin pressure. If not, the market will eventually ask why costs are climbing faster than profits.

Public markets strength helped offset weaker private markets fees

The standout operational performance came from public markets. Cavendish now advises 170 quoted clients and says that represents 11% market share, or roughly 1 in every 9 listed companies in the UK. In a shrinking UK quoted market, winning net clients in the second half is a meaningful achievement.

Public markets transaction revenue rose 6.8% to £21.3 million, even though the number of transactions fell to 62 from 69. That suggests fee quality held up reasonably well there, helped by better execution and stronger collaboration across broking, research, sales and trading.

Private markets were more mixed. Revenue fell 15.6% to £15.5 million from £18.3 million, despite transaction numbers rising 9.7% to 34 from 31. That is the classic warning sign of weaker deal mix – more work, but lower average fees.

Cavendish is clear on the reason: two very sizeable deals dropped out of the period. That does not mean the franchise is broken, but it does show how lumpy advisory revenues can be. On the positive side, the regional private markets team became profitable in the latter part of the year, which suggests the investment case there is starting to show through.

Cavendish cash flow, balance sheet and dividend look supportive

The balance sheet remains a genuine plus point. Cavendish ended the year with £19.2 million of cash and no debt. In a cyclical business, that gives management room to invest without putting the group under financial strain.

Cash did fall from £21.2 million, though that was largely due to dividends, lease payments and share purchases for employee plans. Net cash outflow from financing activities was £5.4 million, while net cash inflow from operating activities was £3.3 million.

Operating cash generation was softer than last year, partly because trade and other receivables increased by £5.0 million. That is worth watching. Growing receivables can be harmless in a busy advisory business, but investors generally prefer to see profits converting cleanly into cash.

The total dividend was held at 0.8p per share, made up of a 0.3p interim dividend and a proposed final dividend of 0.5p. That looks like a confidence signal from the board. It is not a huge yield story based on this RNS alone, but it does tell you management is comfortable enough with the balance sheet to keep shareholder returns steady.

What the Cavendish FY26 outlook says about UK small-cap recovery hopes

The outlook statement is cautiously upbeat. Management expects further benefits from regional expansion, stronger origination and more use of data analytics and AI-enabled workflows. In simple terms, that means using technology to find clients, win work, price mandates better and run the business more efficiently.

Cavendish also sounds mildly optimistic on UK equities. It points to attractive small and mid-cap valuations, possible monetary easing and supportive regulatory and political initiatives aimed at getting more money into UK stocks. If that backdrop improves, Cavendish should be one of the businesses geared into the recovery.

That said, this is still a market-sensitive company. If equity issuance stays muted and larger private deals remain delayed, growth could stay gradual rather than exciting. The company is well positioned, but it is not immune.

What this means for Cavendish shareholders

For retail investors, the big picture is pretty straightforward. Cavendish is showing resilience, not rapid acceleration. The business is diversified, has a strong client base, is debt free, and is investing through the cycle rather than retreating.

The positives are clear: higher revenue, stronger public markets performance, a sharp rise in securities income, stable profitability at the statutory level, and an unchanged dividend. The negatives are also clear: weaker earnings per share, lower core profit, softer private markets fees and lower year-end cash.

On balance, this looks mildly positive. Cavendish is building for better market conditions, and it has the financial strength to do that. The next step now is proving that all this investment turns into stronger profit growth, not just a better story.