finnCap Group (LON:FCAP ) said capital raising activity and market volatility has driven higher corporate advisory and trading revenues and has resulted in the group recording its best quarter on record.

Turnover for the period ticked up to £26.0m from £24.5m boosted by the performance of the group’s M&A division, Cavendish Corporate Finance, which closed 13 private transactions.

The group highlighted that launching debt advisory and private growth capital practices has enhanced its product line up and had further diversified revenue over the period.

To reduce costs, finnCap implemented a 3-month voluntary reduction in salaries and directors' remuneration during the period, deferred recruiting and reduced discretionary expenditure.

Costs increased as a result of the longer duration of the financial period, the cost base assumed from the acquisition of Cavendish, and the additional costs of being a public company throughout the period.

Average operating cost per employee reduced to £175k (FY19: £191k) primarily as a result of lower bonus payments with average staff costs per employee reduced by 15% to £115k (FY19: £136k). Staff costs to revenue were broadly stable at 62% (FY19: 59%).

Non staff operating cost per employee increased by 10% to £60k partly as the result of the transition to being a listed company.

The group said it made limited redundancies and staff furloughs as well as taking ‘the difficult decision’ to not pay any further dividends relating to the year ended 31 March 2020.

Post period end, for the 3 months to 30 June 2020, the Group recorded record turnover of £9.8m up 51% from £4.3m in Q12020 which the group has attributed to boosted capital raising activities as companies tried to strengthen their balance sheets during the coronavirus lockdown.

The group said this included many companies, many of which operate in areas such as life sciences and tech and are at the forefront of the UK's efforts to recover from the pandemic.

The trading performance, combined with the actions taken to protect the business during the initial stage of the COVID-19 pandemic, led to an increase in cash at 30 June to £8.5m.

“This contributed to making the period the best quarter we have ever recorded,” said CEO of finnCap, Sam Smith

Shares in finnCap Group were trading 9.52% higher at 23p on Tuesday morning.

“This strong performance in Q1 coupled with our actions to significantly reduce costs has resulted in us having a much more resilient balance sheet at 30 June 2020,” said Smith.

finnCap said it is interested in reinstating the dividend, but will only do so when the operating environment is more certain and the visibility of revenue becomes clearer.

The company said it will review its position again in November alongside its interim results.

“The overall outlook for the global economy and the effects of COVID-19 remain uncertain and we must continue to be cautious about the overall prospects for the current financial year.

In the shorter term, our pipeline of deals for the first half remains good and we will continue to deliver on our strategy for growth,” added Smith.

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