REG - Frenkel Topping Grp - Trading Update and Notice of Results

Frenkel ToppingAnnouncement

07/02/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230207:nRSG0687Pa&default-theme=true

RNS Number : 0687P  Frenkel Topping Group PLC  07 February 2023

The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 as amended.  With the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.

Frenkel Topping Group plc

("Frenkel Topping", the "Company" or the "Group")

Trading Update for the year ended 31 December 2022

&

Notice of Results

Strong financial performance and delivery against strategy in FY2022

Positive start to FY2023, trading in line with expectations

Frenkel Topping (AIM: FEN), a specialist financial and professional services
firm operating within the personal injury and clinical negligence marketplace,
is pleased to provide the following trading update for the financial year
ended 31 December 2022 ("FY2022") and an outlook for the current financial
year ("FY2023").

The Board expects to report revenues in line with expectations of c.£24.8m
(2021: £18.4m) and adjusted EBITDA of c.£6.1m* (2021: £4.6m) for FY2022.
Pleasingly, EBITDA margin has been stable year on year at c25%.  The Company
had £5.0m of net cash at the year end and remains debt free.  Assets Under
Management ("AUM") has grown to £1,187m (2021: £1,174m) during the year
£129m of new AUM was added within the advisory business.

This performance demonstrates the Company's resilience in a challenging
financial market, as well as the progress made by the Company in diversifying
revenue streams via its focused acquisition strategy and consolidation of the
Personal Injury (PI) and Clinical Negligence (CN) space.

Of note is the performance of the Group's discretionary fund manager, Ascencia
Investment Management ("Ascencia"), where assets on a DFM Mandate increased to
£715m (2021: £676m).

Comparing Ascencia's positive performance against a backdrop of wider market
contraction and material outflows further demonstrates Ascencia's success in
managing multi-asset investment solutions that are positioned to capture the
upside of market fluctuations, while aiming to reduce the negative impact of
market turbulence on client assets.

Ascencia's strong performance in the previous financial year continued last
year, with the core risk-rated strategies outperforming their respective
Private Client Indices/ARC indices. It is testament to the Group's in-house
strategy and approach to risk management and something the Board is
justifiably proud of. The Company views the Ascencia platform as a clear
growth opportunity in the coming years and a key tool to winning future
business. Ascencia portfolios are currently defensively positioned given the
uncertain and opaque investment outlook, with cash ready to be deployed should
the opportunity arise.

The Company has of course not been entirely immune to challenging market
conditions during the year. However, the modest impact on the Group's
recurring revenue, has been replaced by transactional revenue delivered by the
Group's businesses acquired during the last 3 years, proving out the strategy
of diversifying revenue streams. By their nature the margin profile is a
little different on the transaction revenue and certain essential staff costs
and wage inflation has had a modest impact in the latter part of the year, as
well as funding the start-up of Keystone Case Management.

The Company is also pleased to again report its outstanding client retention
rates at 99%.

The Company continued to make significant progress delivering against its
strategy of consolidating the pre-settlement professional services marketplace
in the PI and CN space, positioning Frenkel Topping as a market leader in its
sector. During the first part of the year the Company acquired Cardinal
Management Limited, which is performing to plan, and it raised a further £10m
in July 2022 to support the M&A strategy, completing two further
acquisitions of Somek and Associates Ltd and N-Able Services Ltd in September
2022, both of which have performed to plan and in line with management's
expectations.

Outlook

The new financial year has started well and the Board is confident that the
acquisitions made to date will continue to contribute revenue and profitable
growth to the Group. In January 2023, subsidiaries Forths Forensics and
Bidwell Henderson Cost Consultants (BH) both delivered record revenues and BH
surpassed its previous highest recorded number of files received by 20%.
During the year the Board also expects Keystone Case Management to start
contributing.  Expectations for the year to FY2023 therefore remain unchanged
as a result to of the solid start to the financial year.

Where appropriate the Company will endeavour to migrate AUM onto the Ascencia
platform to be managed internally in order to mitigate, as far as possible,
the impact of any future abnormal market movements which Ascencia has
demonstrably been able to do during the year. It will also look to drive
further synergies from the acquisitions made and integrate them further into a
unified platform and offering by the Group. Finally, the Company is planning
some investment in data analytics in order to better capture and optimise
business development opportunities across the platform.

Notice of results and update on strategy

A comprehensive update and review of the year will be provided with the
Company's annual results, as well as the presentation of an ambitious growth
plan.

Final results for the year ended 31 December 2022 are expected to be announced
on 24th April 2023.

* The financial expectations noted above are preliminary, and subject to
year-end financial close and audit review processes. Adj. EBITDA defined as
before share based compensation, M&A strategy and re-organisation costs.

Richard Fraser, Chief Executive Officer of Frenkel Topping Group plc,
said:

"We are pleased to report on another year of delivery despite challenging
market conditions. A backdrop of market volatility served to highlight the
strength of the DFM subsidiary in the Company's portfolio as well as our
strategy of diversifying revenue streams. We have executed the buy and build
strategy outlined ahead of our capital raise and we are in a strong position
to accelerate growth through the group in the coming years and to capitalise
on a significant opportunity in the personal injury and clinical negligence
space. I am incredibly proud of the teams efforts and look forward to updating
shareholders on progress at the time of our results in April"

 

For further information:

 Frenkel Topping Group plc                                      www.frenkeltoppinggroup.co.uk (http://www.frenkeltoppinggroup.co.uk/)
 Richard Fraser, Chief Executive Officer                        Tel: 0161 886 8000

 finnCap Ltd (Nominated Advisor & Broker)                       Tel: 020 7220 0500
 Carl Holmes/Abigail Kelly/Milesh Hindocha (Corporate Finance)

 Tim Redfern / Charlotte Sutcliffe (ECM)

About Frenkel Topping Group

The Frenkel Topping Group of companies specialises in providing financial
advice and asset protection services to clients at times of financial
vulnerability, with particular expertise in the field of personal injury (PI)
and clinical negligence (CN).

For more than 30 years the Group has worked with legal professionals and
injured clients themselves to provide pre-settlement, at-settlement and
post-settlement services to help achieve the best long-term outcomes for
clients after injury. It boasts a client retention rate of 99%.

Frenkel Topping Group is focused on consolidating the fragmented PI and CN
space in order to provide the most comprehensive suite of services to clients
and deliver a best-in-class service offering from immediately after injury or
illness and for the rest of their lives.

The group's services include the Major Trauma Signposting Partnership service
inside NHS Major Trauma Centres, expert witness, costs, tax and forensic
accountancy, independent financial advice, investment management, and care and
case management.

The Group's discretionary fund manager, Ascencia, manages financial
portfolios for clients in unique circumstances, often who have received a
financial settlement after litigation. In recent years Ascencia has
diversified its portfolios to include a Sharia-law-compliant portfolio and a
number of ESG portfolios in response to increased interest in socially
responsible investing (SRI).

Frenkel Topping has earned a reputation for commercial astuteness underpinned
by a strong moral obligation to its clients, employees and wider society, with
a continued focus on its Environmental, Social and Governance (ESG) impact.

For more information visit:      www.frenkeltoppinggroup.co.uk
(https://protect-eu.mimecast.com/s/WNCMCR1EKSxDwoTNKWD-?domain=frenkeltoppinggroup.co.uk)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTEQLFBXLLZBBF