REG - FRP Advisory Grp PLC - Half-year Report
13/12/2022 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:20221213:nRSM4536Ja&default-theme=true
RNS Number : 4536J FRP Advisory Group PLC 13 December 2022
13 December 2022
FRP ADVISORY GROUP PLC
("FRP", the "Group" or the "Company")
Half Year Results
For the six months ended 31 October 2022
FRP Advisory Group plc, a leading national specialist business advisory firm,
is pleased to announce half year results for the six months ended 31 October
2022 (H1 2023).
FRP seeks to provide solutions that create, preserve and recover value.
Specialising in restructuring, corporate finance, debt, forensics and
pensions, we deliver strategic solutions across a broad range of situations.
Our five service pillars complement each other to support clients throughout
their entire business lifecycle. We draw on experts within each of our service
areas to put the best team forward for each circumstance.
Financial highlights
H1 2023 H1 2022
£m £m
Revenue 49.4 44.7
Underlying Adjusted EBITDA(1) 11.6 11.1
Reported profit before tax 5.4 5.7
Adjusted Total EPS (pence) 3.35 3.25
Basic EPS (pence) 2.58 2.00
Total dividend (pence) 1.7 1.6
Net cash 21.0 9.2
● Revenue increased 10% to £49.4 million (H1 2022: £44.7 million). 9% on an
organic basis, 1% inorganic which is from the Bridgeshield acquisition in
April 2022.
● Underlying adjusted EBITDA(1) up 5% to £11.6 million (H1 2022: £11.1
million)
● Reported profit before tax £5.4 million (H1 2022: £5.7 million).
● Strong balance sheet with net cash(2) at 31 October 2022 of £21.0 million (H1
2022: £9.2 million) and a continued undrawn committed revolving credit
facility ("RCF") of £10 million.
● Adjusted total EPS of 3.35p, reported basic EPS of 2.58p.
○ H1 2022: Adjusted total 3.25p, reported basic 2.00p.
● Q2 Interim dividend(3) of 0.85p.
○ H1 2023: 1.7p (Q1 0.85p and Q2 0.85p) (H1 2022: 1.6p).
Operational highlights
● FRP Corporate Finance completed 40 transactions in H1 2023 with a combined
deal value of £1.2 billion and £0.6 billion of debt raised.
● Engaged within Restructuring to provide both advisory and formal restructuring
services across a range of sectors.
● Administration appointment market share was similar at 13% (H1 2022: 14%),
reflecting a 39% increase in total number of administration appointments.
● 11% year-on-year increase in colleagues to 536 (H1 2022: 485) excluding
Consultants, 9% increase in total fee earners.
● Implementation of key system improvements, to aid operational efficiencies and
to enhance internal controls including Salesforce, a CRM system, and an
upgraded time recorded system. We have also implemented a new risk management
framework and the Group now aligns with ISO 31000.
● In June 2022, the Company executed a secondary placing and given the demand
from investors, also raised an additional £7.5 million gross through the
issue of new shares. Partner shareholders were invited to sell 20% of their
holding in return for signing an extended lock-in to June 2024.
Post period end
● On 7 December 2022 we were pleased to announce the acquisition of APP; who are
based in Limassol, Cyprus and provide advisory, tax and audit services.
Outlook and current trading
● Positive medium-term outlook for all of the Group's markets.
● Well positioned for an expected increase in demand for FRP's broad range of
services.
● The Board is confident of making further progress in the current financial
year and trading is in line with market expectations.
Key Performance Indicators ("KPIs")
Financial H1 2023 H1 2022
£m £m
Revenue 49.4 44.7
Underlying adjusted EBITDA(1) 11.6 11.1
Cash collection (inclusive of VAT where applicable) 52.0 47.1
Adjusted profit before tax(4) 10.2 10.0
Revenue per Partner for 6 months 0.6 0.6
Non-Financial H1 2023 H1 2022
Number of administration appointments 78 56
Number of fee earners, including Partners 422 386
Colleague utilisation rate 63% 60%
(1) Underlying adjusted EBITDA removes exceptional costs and non-cash costs
including share based payments relating to deemed remuneration arising on
acquisitions that is subject to continuing employment and the Employee
Incentive Plan established on IPO and funded by partners, resulting in no
dilution to existing shareholders. This is illustrated in the underlying
adjusted EBITDA table.)
(2) £26.6m gross cash less £5.6m of structured debt (H1 2022: £16.8m less
£7.6m), repayable over approximately three years.)
(3) The Employee Incentive Plan ("EIP") established on IPO was used to grant
options to colleagues. The trust holding these shares is not eligible for
dividends as the rights were waived. When the options vest from 2023 onwards,
the shares will gain rights to dividends.)
(4) Adjusted profit before tax is reported profit before tax of £5.4 million
(H1 2022: £5.7 million) adjusted for share based payments of £4.5 million
(H1 2022: £4.3 million) and exceptional items of £0.3 million (H1 2022:
£nil).)
Geoff Rowley, Chief Executive Officer of FRP Advisory Group plc, said:
"FRP made good progress in the first half, continuing to grow its revenues,
profits and team. Our strategy remains unchanged to deliver sustainable
profitable growth by ensuring our five service pillars work together to
provide solutions that achieve the best possible outcomes.
Our Restructuring team is well positioned to service the expected increase in
demand stemming from the many challenges faced by UK businesses. Uncertainties
persist over how long the available liquidity and government backed loans can
sustain troubled businesses and how proactive key creditors like HMRC and
institutional lenders will be on addressing over-due debts. Our Corporate
Finance team has a good pipeline and are seeing an increase in demand for Debt
Advisory colleagues to support on transactions.
The medium-term outlook for our key markets remains positive and the Board is
confident of making further progress in the current financial year."
Management will host a presentation for analysts this morning at 10:00am, for
details, please contact FRP@mhpgroup.com.
Enquiries:
FRP Advisory Group plc
Geoff Rowley, CEO
Jeremy French, COO
Gavin Jones, CFO
Enquiries via MHP
Cenkos Securities plc (Nominated Adviser and Sole Broker)
Katy Birkin/Max Gould (Corporate Finance)
Alex Pollen (Sales)
Tel: +44 (0) 207 397 8900
MHP (Financial Public Relations)
Oliver Hughes
Charlie Barker
Pete Lambie
Tel: +44 (0) 7710 032 657
FRP@mhpgroup.com (mailto:FRP@mhpgroup.com)
Notes to Editors
FRP is a professional services firm established in 2010 which offers a range
of advisory services to companies, lenders, investors and other stakeholders,
as well as individuals. These services include:
● Restructuring advisory: corporate financial advisory, formal insolvency
appointments, informal restructuring advisory, personal insolvency and general
advice to all stakeholders.
● Corporate finance: mergers & acquisitions (M&A), strategic advisory
and valuations, financial due diligence, capital raising, special situations
M&A and partial exits.
● Debt advisory: raising and refinancing debt, debt amendments and extensions,
restructuring debt, asset based lending and corporate and leveraged debt
advisory.
● Forensic services: forensic investigations, compliance and risk advisory,
dispute services and forensic technology.
● Pensions advisory: pension scheme transaction advisory, pension scheme
restructuring advisory, covenant advisory and corporate governance.
Management statement
The Group delivered another strong performance during the six months to 31
October 2022, continuing to grow its revenues, profits and team. Revenue has
grown by 10% or £4.7m which has been primarily organic. This in turn has led
to an increase in underlying adjusted EBITDA of 5% or £0.5m. The total number
of colleagues increased by 6% over H1 2023, due to demand-led lateral hiring,
and by 11% year-on-year, including colleagues that joined the Group following
the BridgeShield Asset Management Ltd acquisition in April 2022.
It is positive to have been operating in an environment where the pandemic has
for the most part been seen in the rear-view mirror. This has allowed both our
colleagues and the businesses we advise to resume some sense of normality as
teams returned to the office.
Over the last few years, many challenged UK corporates have avoided the need
to consider and implement formal restructuring processes as they took
advantage of the government-backed support measures made available during the
pandemic. Furthermore, key creditors like HMRC have a tax arrears backlog to
address and institutional lenders continue to be supportive where possible. In
today's increasingly challenging environment it is even more important for
clients to secure the best possible advice and more options exist the earlier
our expert advice is sought.
During the first half of our financial year there has been economic and market
related instability, including currency volatility, interest rate rises and UK
government fiscal policy "U turns". These have caused additional uncertainties
for businesses. To compound this, the UK economy is still experiencing
challenges from significant inflation in food, raw materials and energy
prices, supply chain difficulties and wider impacts from the ongoing
Russia/Ukraine conflict. There has also been wage pressures across industries
and growing examples of strike action. This has resulted in an increase in
enquires for restructuring services compared to last year.
Operational review
The Group's broad range of specialist advisory services from five
complementary service pillars: Restructuring Advisory, Corporate Finance,
Forensic Services, Debt Advisory and Pensions Advisory. These help make the
business more versatile and resilient to support and advise clients throughout
their entire lifecycle. While the Group intends to retain its five pillar
structure, it is planned in 2023 that our Pensions Advisory pillar will be
incorporated and relaunched in a new pillar branded Financial Advisory. This
will sit alongside Restructuring Advisory, Corporate Finance, Forensic
Services and Debt Advisory.
Financial Advisory will include our existing client facing, financial and
pre-lending review services, financial modelling expertise and wider
transaction services including financial due diligence for buy-side and
sell-side transactions. The Financial Advisory pillar will also include our
Valuation services and Pensions Advisory services. The connection of our
pillars is a key point of differentiation as colleagues work together to
always ensure the right team from the right locations are working on each
project.
Restructuring
FRP continues to be engaged on formal restructuring appointments across a
range of sectors and is being increasingly mandated on confidential advisory
projects.
The Restructuring team serve the full range of UK clients across all sectors,
with a focus on the core mid-market, with assignments ranging from personal
clients and SMEs right through to higher-profile appointments. Within the
total market, the number of administrations in the first half increased by 51%
to 589 (H1 2022: 390). This is still below pre pandemic levels despite the
long list of well documented headwinds facing UK corporates, as we have
already highlighted above.
FRP's administration appointments increased by 22 to 78 (H1 2022: 56), a 39%
increase. FRP's administration appointment market share was similar at 13% (H1
2022: 14%). Growth in the higher volume liquidations market, which are
typically lower value and less complex, has continued, including Creditors
Voluntary Liquidations ("CVLs") and Compulsory Liquidations. According to
London and Regional Gazettes figures show there were 11,338 formal company
insolvencies (excluding member voluntary liquidations) in England and Wales in
the six months to 31 October 2022. This was 35% higher than in the six months
to 31 October 2021.
Many troubled UK corporates have avoided the need to consider and implement
formal restructuring processes as they have taken advantage of the
government-backed support measures made available during the pandemic.
Furthermore, key creditors like HMRC have a tax arrears backlog to address and
institutional lenders continue to be supportive where possible. The Group
expects that as the headwinds further impact the UK economy, demand for the
Group's restructuring services will continue to increase.
Corporate Finance (including Debt Advisory)
The integrated FRP Corporate Finance brand was launched in July 2022 supported
with a new dedicated corporate finance website to amalgamate the previous FRP
Advisory, Spectrum Corporate Finance (acquired in 2021) and JDC Corporate
Finance (acquired in 2020) brands. The last six months has also seen the
development of centralised support across corporate finance which encompasses
research, marketing and deal origination to provide a strong and consistent
platform for growth.
Despite the well-publicised economic headwinds, M&A in the UK mid-market
proved resilient in H1 2023. FRP Corporate Finance (which includes Debt
Advisory) continued to be an active player in this market, advising on 40
deals in the period with a combined value of £1.2 billion and raising £0.6
billion of debt.
Notable deals in H1 2023 included:
· MBO of healthcare services provider, Partnering Health Limited.
· Sale of multi-brand distributor, BTC Activewear to New Wave Group
AB in Sweden.
· Sale of Blueback Global, a leader in global expansion services,
to TopSource Worldwide.
The team has a good pipeline of existing M&A and Debt Advisory mandates
and the level of new enquiries remains encouraging, although rising interest
rates and the forecast recessionary period is likely to impact buyers'
appetites, particularly in consumer exposed sectors, which could lead to
reduce mainstream M&A activity over H2 2023 compared to last year.
Conversely, this should lead to an increase in debt refinancings and
restructuring related M&A activity.
Forensic Services
FRP's Forensic Services practice anticipates an uptick in fraud related
matters as the economy slows down. FRP are well placed to undertake these
assignments using a combination of forensic accounting, forensic technology
and contentious insolvency skillsets.
FRP's membership of global advisory organisation Eight International has been
enhanced with the launch of a new international Forensics & Dispute
Resolution Network. FRP's Forensic Services team are working in close
collaboration with Eight International's network of leading industry experts
who can provide country-specific expertise and invaluable 'on-the-ground'
knowledge in every corner of the globe. With the launch of this new network,
our clients will have access to an extended, highly specialised, multilingual
team of experts who can help to deliver complex projects in a variety of
issues, from investigations and dispute services to compliance, financial risk
and forensic technology.
The Forensic Services team has been ranked in Band 2 in the Chambers and
Partners Litigation Support Guide for the second year running, with 2022 being
the fourth consecutive year the firm has been recognised within this
international legal directory. In addition, for the first time, the Forensic
Services team have also been recognised by the Chambers and Partners for the
provision of eDiscovery services, coinciding with the introduction of
Relativity's cloud-based e-Discovery solution, RelativityOne.
Financial Advisory
This service pillar will bring together many of FRP's existing services which
include: financial and pre-lending review services, financial modelling
expertise, financial due diligence for buy-side and sell-side transactions,
performance improvement, Valuation services and Pensions Advisory services.
From a company-side advisory perspective our restructuring team focus on
helping client boards and their executive management teams preserve and
restore value during uncertain times. Working collaboratively with the
restructuring team, our performance improvement colleagues provide a
solutions-led approach to delivering stability to an organisation, navigating
corporates back to sustainable growth and thereby restoring the confidence of
key stakeholders.
Our growing Valuation team has increased its breadth of services to provide
valuation advisory and support across the business cycle. The team provides
valuations to support capital raise and investment decisions, independent
valuations in support of transactions and restructuring processes and expert
valuations to support contentious situations such as shareholder disputes. The
team advise a range of stakeholders including funds, shareholders, lenders,
boards of directors and administrators.
The Pensions team has enhanced its offering to provide in depth support to
scheme trustees and employers in finding solutions to address the impact on
defined benefit pension schemes of corporate transactions and volatile
financial performance. This has focussed on managing risk and maximising
value, particularly in a number of business acquisitions, disposals and
re-organisations taking into account the changing dynamics for stakeholders
arising from new regulations and legislation, including the Pensions Schemes
Act 2021.
People and operations
At FRP we focus on the basics; delivering clear, honest advice and always
doing the right thing. Our reputation is built on our colleagues helping
stakeholders to achieve the best possible outcome.
We work hard to attract and retain highly skilled professionals by creating a
rewarding, high-performance environment. We believe highly engaged colleagues
deliver excellent client service and results. An Employee Incentive Plan (EIP)
was established on IPO in order to incentivise employees under which options
over ordinary shares were granted to staff, vesting three years from IPO. The
trust holding these options is not eligible for dividends as rights were
waived. On vesting, the ordinary shares will gain rights to dividends.
In an increasingly competitive environment, we have continued to recruit
talented individuals to join FRP and help us grow in targeted areas. Our
team grew to 536 as at 31 October 2022, representing 11% growth year-on-year.
Team growth can be seen in the table below:
31-Oct-22 30-Apr-22 31-Oct-21
Partners 80 80 76
Other Fee earners 342 317 310
Subtotal - Fee earners 422 397 386
Support 114 107 99
Total colleagues (ex Consultants) 536 504 485
During H1 2023, we announced eight Director promotions and a further 86
promotions across a wide range of senior and specialist roles, from Office
Managers to Associate Directors/Senior Managers.
In August 2022, we launched a Restructuring Advisory service within East
Anglia, with Richard Bloomfield as the appointment taking director. In
December 2022, two new partners, Augoustinos Papathomas and Christina
Papathomas, joined FRP as part of the acquisition of APP in Cyprus. The rest
of the APP team also joined FRP, comprising fourteen colleagues and one
consultant. Adding offices in selective new locations is part of our growth
strategy and as at December 2022 we currently have 26 locations (H1 2022: 23)
in the UK and 1 in Cyprus. All offices continue to work well together, drawing
on specialists from our five complementary service pillars as necessary, in
order to deliver the best possible service and outcome.
The health, safety and wellbeing of all of our colleagues remains a key
priority. We feel that colleague interactions within an office environment
are important for learning and development, teambuilding and mental wellbeing.
Ongoing colleague learning and development remains a focus and a new Learning
Management System (LMS) is planned to be in place in early 2023.
The Group has been progressing projects to improve operational efficiencies
and risk management, enhancing internal controls which include:
● The successful integration of a new CRM system, Salesforce and an upgraded
time recording system.
● The rollout of a new HR system to include L&D modules and a Document
Management System ("DMS") during the second half of this financial year.
● Adopting a new Enterprise Risk Management ("ERM") framework, enabling ISO
31000 certification in July 2022.
● Together with enhancements to the Group's Information Security Management
System ("ISMS"), we are working towards achieving ISO 27001 accreditation
within FY 2023.
Environmental, Social and Governance ("ESG")
The ESG Committee ensures the Group has focus on relevant and proportionate
value creative ESG initiatives. We have committed the Group to being Carbon
Neutral by 2030. During H2 2023 we will launch an electric car scheme for
colleagues to negotiate terms to lease or purchase electric cars and we offer
flexible working arrangements which reduces colleague commuting. For further
details please see our website:
https://www.frpadvisory.com/about/approach/corporate-social-responsibility/environmental-social-and-governance/
FRP have become a member of the UN Global Compact, whose aim is to strengthen
corporate sustainability worldwide. Over 17,000 companies across 177 countries
participate and membership will assist FRP to commit to, assess, define,
implement, measure and communicate our sustainability strategy.
In October 2022, the Insolvency Service and R3's Diversity and Inclusion
Steering Group announced the appointment of 19 Diversity and Inclusion
Champions, from organisations across the insolvency and restructuring
landscape. Two FRP colleagues will join the 17 other champions to act as role
models, share their experience, and inspire change, to support the steering
group as it seeks to become more diverse and inclusive.
FRP has committed to support charities or similar organisations that provide
aid for those who are homeless, in poverty, for children's education,
well-being and health and for environmental issues.
Selective acquisitions
Our focus is organic growth, supplemented with selective acquisitions that
meet our strict criteria. The three criteria we focus on when it comes to an
acquisition are: cultural fit, strategic fit (within our five pillars/growth
region) and economic fit (acceptable transaction economics).
In December 2022 FRP acquired APP, an advisory, tax and audit firm; are based
in Limassol, Cyprus. Augoustinos Papathomas and Christina Papathomas joined
FRP as Partners. This acquisition further strengthens our international
presence and supports our work with global advisory organisation Eight
International, enabling us to better support our clients on international
matters.
Following an acquisition we treat the first 12 months' contribution to the
Group as inorganic, with contribution from month 13 onwards becoming organic.
The contribution from the April 2022 acquisition of BridgeShield Asset
Management Limited is in line with management's expectations.
A strong financial performance
The Group delivered another strong performance during H1 2023, continuing to
grow revenue and underlying adjusted EBITDA. The Group generated £49.4
million in revenues over the six months to 31 October 2022, up by 10% or £4.7
million on the same period last year (H1 2022: £44.7 million). This is split
organic growth 9% and inorganic growth 1%. Underlying adjusted EBITDA was
£11.6 million, up 5% or £0.5 million compared with the same period last year
(H1 2022: £11.1 million).
Reported profit before tax for the period was in line with the Board's
expectations at £5.4 million (H1 2022: £5.7 million), driven by exceptional
costs, an increased share based payment charge and new locations. Converting
work in progress to cash remains a top priority, however our success in
winning larger, more complex assignments can extend the working capital cycle.
In June 2022, the Company completed a £39 million share placing and given the
demand from new and existing institutional investors, this included raising
£7.5 million (gross) through the issue of new ordinary shares. The
transaction increased the free float and market liquidity of FRP, whilst
Partner shareholders were invited to sell up to 20% of their holding in return
for entering into an extended lock-in arrangement to June 2024. This
successful placing gives the Group sufficient options to act as acquisition
opportunities arise, subject to our selective criteria of cultural fit,
strategic fit and mutually acceptable transaction economics being met.
Dividend
Due to our continued profitability and cash generation, in line with our
stated dividend policy, the Board declares an interim dividend for Q2 2023 of
0.85p per eligible share. This dividend will be paid on 24 March 2023 to
shareholders on the Company's register on 24 February 2023, with an
ex-dividend date of 23 February 2023. This dividend takes the total for H1
2023 to 1.7p per eligible share (H1 2022: 1.6p).
Going concern
During H1 2023, FRP has continued to grow profitably. The Group had net cash
of £21.0 million (H1 2022: £9.2 million) and an undrawn RCF of £10 million
as at 31 October 2022. Net cash is calculated based on £26.6m gross cash less
£5.6m of structured debt (repayable over approximately three years).
The Directors have made appropriate enquiries and consider that the Group has
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, the Directors continue to adopt the going concern basis
in preparing the financial statement. Further detail on the assessment of
going concern can be found within note 2.3 of this interim financial report.
Current trading and outlook
FRP is a resilient business, with a track record of growth regardless of
general economic conditions. We have a robust business model and our five
complementary service pillars are available to support clients throughout
their entire lifecycle. This breadth of services enables us to help clients
review their operating models and adapt or evolve as needed, in a
fast-changing environment subject to many disruptive and economic pressures.
Our Restructuring team is well positioned to service the expected increase in
demand stemming from the many challenges faced by UK businesses. Uncertainties
persist over how long the available liquidity and government backed loans can
sustain troubled businesses and how proactive key creditors like HMRC and
institutional lenders will be on addressing over-due debts. Our Corporate
Finance team has a good pipeline and are seeing an increase in demand for Debt
Advisory colleagues to support on transactions. The group has a strong balance
sheet and a structure that provides a good level of flexibility to put forward
the right team from the right locations for each project.
The medium-term outlook for our key markets remains positive and the Board is
confident of making further progress in the current financial year.
Geoff Rowley Nigel Guy
Chief Executive Officer Non-Executive Chairman
Underlying adjusted results
For the six months ended 31 October 2022
Calculation of underlying adjusted EBITDA
(Earnings Before Interest Tax Depreciation and Amortisation)
£m H1 2023 H1 2022 FY 2022
Reported profit before tax (PBT) 5.4 5.7 15.1
Add interest, depreciation, amortisation 1.4 1.1 2.6
Reported EBITDA 6.8 6.8 17.7
Add exceptional items 0.3 - -
Add share based payment expense relating to the Employee Incentive Plan 3.3 2.9 5.4
Add share based payment expense - deemed remuneration 1.2 1.4 2.6
Underlying adjusted EBITDA 11.6 11.1 25.7
At present the Company has expensed in H1 2023 but not underlying adjusted
EBITDA for:
Ø Employers National Insurance due to the EIP awards when the options vest in
2023, £0.9m (H1 2022: £0.6m) accrued in the period.
Consolidated statement of comprehensive income
For the six months ended 31 October 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
Notes £ million £ million £ million
Revenue 49.4 44.7 95.2
Personnel costs (32.3) (28.9) (58.8)
Depreciation and amortisation (1.2) (1.0) (2.1)
Other operating expenses (10.0) (8.9) (18.7)
Exceptional costs 3 (0.3) - -
Operating profit 5.6 5.9 15.6
Finance income 0.1 - -
Finance costs (0.3) (0.2) (0.5)
Net finance costs (0.2) (0.2) (0.5)
Profit before tax 5.4 5.7 15.1
Taxation 0.3 (1.2) (3.2)
Profit for the period 5.7 4.5 11.9
Total comprehensive income for the period 5.7 4.5 11.9
Earnings per share (in pence)
Total 4 2.30 1.85 4.90
Basic 4 2.58 2.00 5.35
Diluted 4 2.42 1.91 5.04
Adjusted earnings per share (in pence)
Total 4 3.35 3.25 7.57
Basic 4 3.76 3.52 8.27
Diluted 4 3.51 3.36 7.80
All results derive from continuing operations.
Consolidated statement of financial position
For the six months ended 31 October 2022
Restated
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
Notes £ million £ million £ million
Non-current assets
Goodwill 10.2 9.6 10.2
Other intangible assets 0.7 0.7 0.7
Property, plant and equipment 2.7 2.5 2.8
Right of use asset 5.6 3.9 6.3
Deferred tax asset 4.7 1.8 2.4
Total non-current assets 23.9 18.5 22.4
Current assets
Trade and other receivables 6 48.5 46.2 46.1
Cash and cash equivalents 26.6 16.8 24.9
Total current assets 75.1 63.0 71.0
Total assets 99.0 81.5 93.4
Current liabilities
Trade and other payables 7 26.1 26.7 30.2
Loans and borrowings 1.6 2.0 2.0
Lease liabilities 1.7 0.4 1.3
Total current liabilities 29.4 29.1 33.5
Non-current liabilities
Trade and other payables 7 5.4 6.3 5.7
Loans and borrowings 4.0 5.6 4.8
Lease liabilities 4.0 3.6 4.9
Total non-current liabilities 13.4 15.5 15.4
Total liabilities 42.8 44.6 48.9
Net assets 56.2 36.9 44.5
Equity
Share capital 0.2 0.2 0.2
Share premium 31.7 23.7 23.7
Treasury shares reserve (0.0) (0.0) (0.0)
Share based payment reserve 2.9 0.2 (1.1)
Merger reserve 1.3 1.3 1.3
Retained earnings 20.1 11.5 20.4
Shareholders equity 56.2 36.9 44.5
Approved by the Board and authorised for issue on 12 December 2022.
Jeremy
French
Gavin Jones
Director,
COO
Director, CFO
Company Registration No. 12315862
Consolidated statement of changes in equity
For the six months ended 31 October 2022
Called up share capital Share premium account Treasury share reserve Share based payment reserve Merger reserve Retained earnings Total equity
£ million £ million £ million £ million £ million £ million £ million
Balance at 31 October 2021 (unaudited, restated) 0.2 23.7 (0.0) 0.2 1.3 11.5 36.9
Profit for the period - - - - - 7.5 7.5
Other movements - - (0.0) - - (0.0) (0.0)
Dividends - - - - - (3.6) (3.6)
Share based payment expense - - - 2.5 - - 2.5
Deemed remuneration - - - 1.2 - - 1.2
Transfer to retained earnings - - - (5.0) - 5.0 -
Balance at 30 April 2022 (audited) 0.2 23.7 (0.0) (1.1) 1.3 20.4 44.5
Profit for the half year - - - - - 5.7 5.7
Dividends - - - - - (6.0) (6.0)
Issue of share capital 0.0 8.0 - - - - 8.0
Share based payment expense - - - 3.3 - - 3.3
Deemed remuneration - - - 0.7 - - 0.7
Balance at 31 October 2022 (unaudited) 0.2 31.7 (0.0) 2.9 1.3 20.1 56.2
Consolidated statement of cash flows
For the six months ended 31 October 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
£ million £ million £ million
Cash flows from operating activities
Profit before taxation 5.4 5.7 15.1
Depreciation, amortisation and impairment (non cash) 1.2 1.0 2.1
Share based payments: employee options 3.3 3.0 5.4
Share based payments: deemed remuneration 0.7 1.4 2.6
Net finance expenses 0.2 0.2 0.5
Increase in trade and other receivables (2.4) (3.9)
(3.5)
Decrease in trade and other payables (5.1) (2.3) 1.6
Tax paid (0.2) (1.7)
(5.5)
Net cash from operating activities 3.1 3.4 18.3
Cash flows from investing activities
Purchase of tangible assets (0.3) (0.6) (1.4)
Acquisition of subsidiaries less cash acquired (0.4) (3.6)
(4.4)
Interest received 0.0 - -
Net cash used in investing activities (0.7) (4.2) (5.8)
Cash flows from financing activities
Gross proceeds from share sales 7.5 -
-
Dividend (6.0) (5.6)
(9.2)
Principal elements of lease payments (0.7) (0.6)
(1.2)
Repayment of loans and borrowings (1.2) (0.4)
(1.2)
Interest paid (0.3) (0.2)
(0.4)
Net cash used in financing activities (0.7) (6.8) (12.0)
Net increase/(decrease) in cash and cash equivalents 1.7 (7.6) 0.5
Cash and cash equivalents at the beginning of the period 24.9 24.4 24.4
Cash and cash equivalents at the end of the period 26.6 16.8 24.9
Notes to the Financial Statements
For the six months ended 31 October 2022
1. General information
FRP Advisory Group plc (the "Company") and its subsidiaries' (together "the
Group") principal activities include the provision of specialist business
advisory services for a broad range of clients, including restructuring and
insolvency services, corporate finance, debt advisory, forensic services and
pensions advisory.
The Company is a public company limited by shares registered in England and
Wales and domiciled in the UK. The address of the registered office is 110
Cannon Street, London, EC4N 6EU and the company number is 12315862.
2. Basis of preparation and accounting policies
The condensed consolidated financial information is prepared in sterling,
which is the presentational currency of the Company. Amounts in this
financial information are rounded to the nearest £0.1 million.
The condensed consolidated financial information has been prepared on the
basis of Company accounting policies and should be read in conjunction with
the Group's last annual consolidated financial statements.
This financial information does not include all of the information required
for a complete set of IFRS financial statements.
This condensed consolidated H1 2023 financial information does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 30 April 2022 were approved by the
Board of Directors on 22 July 2022 and delivered to the Registrar of
Companies. The report of the auditor on those accounts was unqualified, did
not include a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain statements
under section 498 (2) or (3) of the Companies Act 2006.
2.1 Basis of consolidation
The financial statements incorporate the results of FRP Advisory Group plc
and all of its subsidiary undertakings as at 31 October 2022.
FRP Advisory Group plc is the 100% shareholder of FRP Advisory Trading
Limited. FRP Advisory Trading Limited has eight wholly owned subsidiaries,
FRP Debt Advisory Limited, FRP Corporate Finance Limited, Litmus Advisory
Limited, Abbott Fielding Limited, JDC Accountants & Business Advisors
Limited, JDC Holdings Limited, Spectrum Corporate Finance Limited and
BridgeShield Asset Management Limited. FRP Advisory Trading Limited is also a
member of FRP Advisory Services LLP and Apex Debt Solutions LLP. JDC Holdings
Limited has two subsidiaries, Jon Dodge & Co Limited and Walton Dodge
Forensic Limited. FRP has 100% of the economic interest in JDC Accountants
& Business Advisors Ltd.
2.2 Significant accounting policies
Accounting policies adopted in preparation of the H1 2023 condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 30
April 2022.
2.3 Going concern
The business has been, and is currently, both profitable and cash generative.
It has consistently grown year on year for 12 years and has proved to be
resilient, growing in both periods of economic growth and recession.
At period end the Group had net cash of £21.0m. The Group also has available
an undrawn £10m committed revolving credit facility. Ongoing operational cash
generation and this cash balance mean we have sufficient resources to both
operate and move swiftly should acquisition opportunities arise.
The quality of client service, strong referral network and barriers to enter
the market, together with the strong cash position, make the Board confident
that the Company will continue to grow. In terms of diversification, offices
can adapt quickly to supporting each other and work on both higher value
assignments or higher volume lower value jobs. Financial Advisory, Forensic
Services, Corporate Finance and Debt Advisory can equally support the
Restructuring Advisory offering and also earn fees autonomously.
In the unlikely event that the business has a significant slowdown in cash
collections, the business has a number of further options available to
preserve cash.
Having due consideration of the financial projections, the level of
structured debt and the available facilities, it is the opinion of the
Directors that the Group has adequate resources to continue in operation for a
period of at least 12 months from signing these financial statements and
therefore consider it appropriate to prepare the Financial Statements on the
going concern basis.
2.4 Restatement of prior year results
The Group have changed their dividend recognition policy. Previously the Group
recognised interim dividends at the point when the Board declared publicly,
however, going forward the Group will follow paragraph 2.10 of the ICAEWs
Technical Release 02/17BL and recognise interim dividends when paid. The
impact of this change results in the de-recognition of a £1.8 million interim
dividend liability in H1 2022 as it was paid in H2 2022, with a corresponding
increase in net assets and retained earnings of the same amount. There was
no impact on the Group's profit or cash flows.
3. Exceptional costs
Exceptional costs relate to the placing in June 2022, which included an
extension of the lock-in for Partners.
4. Earnings per share ("EPS")
The EPS has been calculated using the profit for the year and the weighted
average number of ordinary shares outstanding during the year, as follows:
EPS Adjusted EPS EPS Adjusted EPS
£m H1 2023 H1 2023 H1 2022 H1 2022
Reported Profit after tax 5.7 5.7 4.5 4.5
Add Exceptional items - 0.3 - -
Add Share based payments - 4.5 - 4.3
Less deferred tax - (2.2) - (0.9)
Adjusted Profit after tax 5.7 8.3 4.5 7.9
Total shares in issue 247,448,913 247,448,913 243,191,489 243,191,489
Total share EPS (pence) 2.30 3.35 1.85 3.25
Weighted average shares in issue excluding EBT 220,504,872 220,504,872 224,441,489 224,441,489
Basic EPS (pence) 2.58 3.76 2.00 3.52
Dilutive potential ordinary shares under share option schemes 15,213,834 15,213,834 10,811,851 10,811,851
Weighted diluted shares in issue 235,718,706 235,718,706 235,253,340 235,253,340
Diluted EPS (pence) 2.42 3.51 1.91 3.36
The Employee Benefit Trust does not have an entitlement to dividends, holding
26,944,041 (H1 2022: 18,750,000) shares of the above 247,448,913 (H1 2022:
243,191,489) ordinary shares.
5. Dividend
The Board declared an interim dividend for Q2 2023, the period to 31 October
2022 of 0.85p per eligible* share. This dividend will be paid on 24 March 2023
to shareholders on the Company's register on 24 February 2023, with an
ex-dividend date of 23 February 2023.
*An Employee Incentive Plan (EIP) established on IPO was used to grant options
to staff. The trust holding these shares is not eligible for dividends, rights
were waived. When the options vest from March 2023 onwards, the shares will
gain rights to dividends.
6. Trade and other receivables
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
Trade and other receivables £ million £ million £ million
Trade receivables 6.0 7.7 7.2
Other receivables 2.4 1.8 3.6
Unbilled revenue 40.1 36.7 35.3
48.5 46.2 46.1
The ageing profile of non-related party trade receivables is as follows:
As at As at As at
31 Oct 22 31 Oct 21 30 Apr 22
Due in £ million £ million £ million
<30 Days 3.0 4.0 3.4
30-60 Days 1.0 1.5 1.7
60-90 Days 0.3 0.5 0.8
>90 Days 1.7 1.7 1.3
Total 6.0 7.7 7.2
7. Trade and other payables
Restated
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
Current liabilities £ million £ million £ million
Trade payables 0.7 0.7 1.6
Other taxes and social security costs 5.7 4.9 7.4
Liabilities to Partners go forward 10.9 11.5 9.1
Liabilities to Partners cessation profits at IPO - 3.9 1.3
Deferred consideration - 0.8 0.4
Other payables and accruals 8.8 4.9 10.4
26.1 26.7 30.2
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 22 31 Oct 21 30 Apr 22
Non-current liabilities £ million £ million £ million
Other payables and accruals 1.1 2.2 1.4
Partner capital 4.3 4.1 4.3
5.4 6.3 5.7
8. Post balance sheet events
In December 2022 FRP acquired APP Advisory Ltd and the economic rights to APP
Audit Co Ltd; both are based in Limassol, Cyprus. The business provides
advisory, tax and audit services.
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 IR BCBDDDSBDGDDRecent news on Frp Advisory
See all newsREG - FRP Advisory Grp PLC - Total Voting Rights
AnnouncementREG - FRP Advisory Grp PLC - Holding(s) in Company
AnnouncementREG - FRP Advisory Grp PLC - Holding(s) in Company
AnnouncementREG - FRP Advisory Grp PLC - Result of Placing
AnnouncementREG - FRP Advisory Grp PLC - Proposed Secondary Placing & Lock-in Extension
Announcement