REG - Frenkel Topping Grp - Trading Update

Frenkel ToppingAnnouncement

03/02/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250203:nRSC5511Va&default-theme=true

RNS Number : 5511V  Frenkel Topping Group PLC  03 February 2025

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 2024

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 2024 ("FY2024") and an outlook for the current financial
year ("FY2025").

                                            31 December 2024*  31 December 2023  % change

                                            (£m)               (£m)
 Revenue                                    37.4               32.8              14%
 Recurring revenue                          13.4               12.0              12%
 Non-Recurring Revenue                      24.0               20.8              15%
 Gross profit                               14.4               13.9              4%
 Adjusted EBITDA **                         8.0                8.0               -
 Cash & Cash equivalents                    3.1                2.4               29%
 Net Cash / (Debt)                          (3.8)              2.4               -158%
 Funds Under Management ("FUM")             1,560              1,335             17%
 Assets on a discretionary mandate ("DFM")  1,031              820               26%

 

*Unaudited - Financial expectations noted above are preliminary and subject to
final review processes.

**EBITDA before share based compensation, acquisition strategy, exceptional,
integration and reorganisation costs

 

FY2024 results are expected to be in line with management expectations and
operational progress continued in the second half of the year with a focus on
integration across the Group.  We have addressed the challenges faced within
Partners in Costs ("PIC") during 2024 with strategic appointments and a focus
on optimising key business processes creating a stable foundation for 2025.
The Board is confident that PIC can now handle the increased workload and it
is pleasing to see PIC regaining momentum and an increasing demand for its
services.

Our other businesses are performing in line with management's expectations.

Pleasingly, the momentum in growing Funds Under Management (FUM) also
continued as expected in the second half. The successful integration of the
businesses into Group, combined with the strategic overlay of data
interrogation has seen total growth in FUM of £225m in FY2024. This
represents overall growth of 17% which is an improvement on the previous
financial year where we delivered growth of 12%.

In particular, Ascencia has continued to perform strongly and, for the first
time our assets on a discretionary mandate have surpassed the £1bn mark, an
impressive milestone for the Group. The addition of £211m of DFM in the year
represents excellent growth of 26% which compares favourably to the previous
financial year when we delivered growth of 15%, demonstrating the resilience
of our portfolios. We are also delighted to have maintained our excellent 99%
client retention rate within our IFA business for the year.

As a result of the above highlighted performance, management expects to
deliver revenue growth of 14% at £37.4m and adjusted EBITDA of £8.0m for
FY2024, in line with the prior financial year.

Recurring revenue

-     Our recent acquisition strategy has successfully embedded us within
our customer base. This, assisted by a strong sales team, led to a record year
of FUM growth across both advisory and discretionary businesses.

-     During 2024 the Board was delighted to announce that Ascencia
Investment Management won two awards, being recognised as Highly Commended in
the Defaqto Defensive Comparator Sector and being awarded with the ARC 3D
Research Award this year.

-     Money Market Solution (MMS) launched in June 2023 has grown from
£39m to £129.5m.

-     New FUM mandates won towards the end of the year has seen a demand
for higher-margin fully invested solutions and products outweigh that of the
MMS, which is a positive indicator for the year ahead.

 

 

 

Non-Recurring Revenue

-     Actions taken during 2024 to address the challenges within PIC mean
we start 2025 with a stable base and the Board remain confident in the future
growth of PIC and demand for its services.

-     North West Law, acquired in April 2024, has performed in line with
management's expectations and 2025 will see deeper integration with our other
Cost Law firms, which is expected to improve collaboration and
cross-referrals.

Consumer Duty

Given the unique nature and vulnerability of Frenkel Topping's Clients, the
Company continues to firmly focus on embedding Consumer Duty as a core,
underlying principle throughout its business operations and client
interactions.

The Non-Executive and Executive 'champions' meet on a regular basis to discuss
the successful implementation of the pillars of Consumer Duty and we undertake
regular client surveys to establish their understanding of the products and
services being offered and their satisfaction with the outcome of any
involvement. We are pleased to announce a NPS (Net Promoter Score) of 71 which
demonstrates a much higher than industry benchmark (44) in Client Experience.

National Insurance & National Minimum Wage

Post the most recent government financial budget the Board has spent time
assessing the impact on the current financial year and future periods. The
anticipated impact of National Insurance (NI) and National Minimum Wage (NMW)
is expected to be c.£360k in FY2025 and c.£500k thereafter on an annualised
basis. These increases are expected to be largely absorbed within the current
financial year however, inevitably not all of the increases can be offset and
hence are expected to moderately impact this current year by c.£200K. Clearly
the Board will work hard to mitigate this external headwind as far as possible
through pricing and technology efficiencies.

Outlook

January 2025 has seen continued positive momentum taken through from the
previous financial year with a strong pipeline of new AUM opportunities being
pursued, which provides confidence for the start of the new financial year.
Overall, the clear opportunity remains for the Group to continue to
consolidate its position as the leader in the provision of financial and
professional services within the niche personal injury and clinical
negligence space. Consequently, we are confident that we can continue to
deliver growth in shareholder value in the years ahead.

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

 Cavendish Capital Markets Ltd (Nominated Advisor & Broker)        Tel: 020 7220 0500
 Carl Holmes/ Isaac Hooper/ Fergus Sullivan (Corporate Finance)

 Tim Redfern / Jamie Anderson (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  TSTSDUFUFEISEEF