REG - FRP Advisory Grp PLC - Half-year Report
12/12/2023 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:20231212:nRSL4065Wa&default-theme=true
RNS Number : 4065W FRP Advisory Group PLC 12 December 2023
12 December 2023
FRP ADVISORY GROUP PLC
("FRP", the "Group" or the "Company")
Half Year Results
For the six months ended 31 October 2023
FRP Advisory Group plc, a leading national specialist business advisory firm,
announces its half year results for the six months ended 31 October 2023 ("H1
2024").
FRP seeks to deliver solutions that create, preserve and recover value,
enabling businesses to navigate a broad range of complex situations.
Specialising in Restructuring, Corporate Finance, Debt, Forensics and
Financial Advisory, we develop effective strategies tailored to the needs of
businesses of all kinds. 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
situation.
Financial H1 2024 H1 2023 Growth
Revenue £58.7m £49.4m 19%
Underlying adjusted EBITDA(1) £15.5m £11.6m 34%
Reported profit before tax £11.5m £5.6m 105%
Adjusted profit before tax(3) £13.8m £10.2m 35%
Reported basic EPS 3.76p 2.68p 41%
Adjusted total EPS(4) 4.20p 3.35p 25%
Cash collection (inclusive of VAT where applicable) £56.3m £52.0m 8%
H1 dividend 1.8p 1.7p 6%
Net cash(2) £11.7m £21.0m (56%)
Revenue per Partner for 6 months £0.7m £0.6m 17%
Non-Financial
Number of administration appointments 169 78 117%
Number of fee earners, including Partners 484 422 15%
Number of colleagues, excluding Consultants 622 536 16%
Colleague utilisation rate 65% 63% 3%
Financial highlights
· Strong profitable growth
o Revenue increased by 16% on an organic basis and by 3% on an inorganic
basis (APP and Wilson Field Group acquisitions)
o Growth was driven by an uptick in restructuring activity levels
o Underlying adjusted EBITDA grew by 34% to £15.5m
· Balance sheet strength maintained
o Net cash at 31 October 2023 of £11.7 million(2)
o Continued undrawn committed revolving credit facility ("RCF") of £10
million, along with an accordion acquisition facility of £15 million.
· Increased interim dividend
o H1 2024 dividend of 1.8p (Q1 0.9p and Q2 0.9p), up 6% on prior year
Operational highlights
· Continued progress across five specialist service pillars:
o Restructuring
§ Administration appointments more than doubled in H1 2024 to 169 (H1 2023:
78) as market activity increased
§ Administration appointment market share grew to 20% by volume which
includes some group appointments. Underlying was circa. 15% (H1 2023: 13%)
o FRP Corporate Finance (including Debt Advisory)
§ Continued to remain active in the mid market, completing 25 transactions in
H1 2024 with a combined deal value of £537 million and £209 million of debt
raised
§ Signs of an increase in debt refinancing and restructuring related M&A
activity
o Forensic Services
§ High level of activity across both investigations and disputes
o Financial Advisory
§ Actively engaged in a range of assignments including option reviews and
transaction due diligence, supported by our valuations and pensions advisory
specialists
· Seventh acquisition since IPO in March 2020
o Sheffield-based Wilson Field Group acquired in September 2023 for £4.8
million
o Wilson Field provides restructuring advisory and debt advisory services to
clients both locally and nationwide, supported by the Wilson Field website and
operational platform
o On an annual basis it is expected that Wilson Field's underlying
incremental contribution to FRP will be revenue of £5.6 million and adjusted
EBITDA of £1.1 million
o Two of the firm's Directors joined as Partners along with their team of 63
· Further investment in operational infrastructure
o Formal certification of International Standard ISO/IEC 27001:2013 issued
in November 2023 confirming that FRP have put in place a system to manage
risks related to the security of data owned or handled by the Group
· Investment in colleagues
o FRP have launched a new leadership programme for 100 colleagues nationwide
o Continued investment in learning and development, including the launch of
a learning management system ("LMS")
o Consistent high level of staff retention within FRP compared to the wider
professional services industry (FRP voluntary attrition this half 10%, H1
2023: 10%)
Outlook and current trading
· The FRP team is experiencing increased demand for their advice
and we have leading positions in our core markets
· The Restructuring Team are considerably more active this half
compared to the same period a year ago, with administration market share gains
· Trading to date has been positive and the Board expects to exceed
current consensus market expectations for FY 2024. If current activity levels
continue the Board expects the Company to deliver revenue of £123m and
adjusted EBITDA of £32m for FY 2024.
Key Performance Indicators ("KPIs")
Financial H1 2024 H1 2023
Revenue £58.7m £49.4m
Underlying adjusted EBITDA(1) £15.5m £11.6m
Cash collection (inclusive of VAT where applicable) £56.3m £52.0m
Adjusted profit before tax(3) £13.8m £10.2m
Revenue per Partner for 6 months £0.7m £0.6m
Non-Financial H1 2024 H1 2023
Number of administration appointments 169 78
Number of fee earners, including Partners 484 422
Colleague utilisation rate 65% 63%
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 below.
2) £15.7m gross cash less £4.0m of structured debt (H1 2023: £26.6m
less £5.6m), repayable over two and a half remaining years.
3) Adjusted profit before tax is reported profit before tax of £13.8m
(H1 2023: £10.2m) adjusted for share-based payments of £2.3m (H1 2023:
£4.5m) and exceptional items of £nil (H1 2023: £0.1m).
4) See note 4
Geoff Rowley, Chief Executive Officer of FRP Advisory Group plc, said:
" I am proud of the team's achievements to date and FRP has performed well in
the first half. Our strategy is to ensure our five service pillars and 28
locations are connected and work together to provide solutions that achieve
the best possible outcomes, which supports our delivery of sustainable
profitable growth. Our total first half revenue growth was 19%, of which
organic revenue growth accounted for 16%, while underlying adjusted EBITDA
grew by of 34%.
Our Restructuring Team are considerably more active compared to the same
period last year and have increased their administration market share. The
Forensic Services team is expanding, and are seeing an increase in demand for
support on disputes and investigations, often driven by fraud related matters
or the need for independent investigations. Financial Advisory and FRP
Corporate Finance (including Debt Advisory) remain active in the mid-market
and have a healthy H2 pipeline, although increased caution among investors and
lenders in the current environment is also driving an increase in due
diligence which means deals are taking longer to complete. There is also an
increase in debt refinancing and restructuring related M&A activity.
As demand for our services continues to increase, we remain committed to
retaining our healthy collegiate culture where we promote the development,
health and well-being of our colleagues and believe that we can best serve
clients by ensuring colleagues collaborate and help each other. FRP always
aims to put forward the right team, from the right services pillars and
locations for each project.
Trading to date has been positive and the Board expects to exceed current
consensus market expectations for FY 2024. FRP is well positioned in our core
markets, to support corporates through their business cycle and the Board is
confident of continued progress."
Enquiries:
FRP Advisory Group
plc
Geoff Rowley, CEO
Jeremy French, COO
Gavin Jones, CFO
Enquiries via MHP
Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker)
Katy Birkin/Stephen Keys/George Lawson (Corporate Finance)
Tel: +44 (0) 207 220 0500
Investec Bank plc (Joint Broker)
Carlton Nelson/James Rudd (Corporate Broking)
Tel: +44 (0) 207 597 4000
MHP (Financial Public Relations)
Oliver Hughes
Charlie Barker
Catherine Chapman
Tel: +44 (0) 783 462 3818
FRP@mhpgroup.com
Notes to Editors
FRP is a leading national specialist business advisory firm established in
2010. It 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.
· Financial Advisory: transaction services including financial due
diligence, lender services, financial modelling, valuations, pensions and
company-side advisory services.
Management statement
The Group delivered another strong performance during H1 2024, continuing to
grow its revenues, profits and team. Revenue grew by 19% (£9.3m) which was
primarily organic. This in turn led to an increase in underlying adjusted
EBITDA of 34% (£3.9m). The total number of colleagues increased by 13% over
H1 2024, due to demand-led lateral hiring, and by 16% year-on-year, including
colleagues that joined the Group following the Wilson Field Group acquisition
in September 2023.
Operational review
The Group's multidisciplinary nature, with experts across Restructuring
Advisory, Corporate Finance, Debt Advisory, Forensic Services and Financial
Advisory, ensures that the business is versatile, resilient and can offer
tailored solutions to support and advise clients throughout their entire
lifecycle.
Restructuring
FRP continues to be one of the most active Restructuring Advisory businesses
in the UK, supporting clients on both stress and distress situations where we
create commercial solutions to achieve the best possible outcome.
During the 2023 calendar year, the restructuring market has seen an increase
in activity levels, including administrations approaching pre-pandemic levels.
Companies with significant borrowings who have rolled off lower interest rate
arrangements are now subject to much higher debt service costs, with interest
rates now considerably higher than the 2009-2021 period. Businesses are also
exposed to much higher levels of cost inflation. Certain sectors such as
construction, property, casual dining and food service, retail, administrative
and support services are finding current trading conditions particularly
challenging.
The Restructuring team serves the full range of UK clients across all sectors,
with a focus on the core mid-market, their assignments range from personal
clients and SMEs through to higher-profile appointments.
Within the UK, the number of administrations in the first half increased by
37% to 846 (H1 2023: 616). FRP's administration appointments doubled year on
year to 169 (H1 2023: 78). FRP's administration appointment market share grew
to 20%, although this is slightly higher than our underlying share, circa 15%,
due to reported group appointments where FRP may be listed as the
administrator for many different entities in an overall group (H1 2023: 13%).
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. There were 12,914 formal
company insolvencies (excluding Member Voluntary Liquidations) in England and
Wales in the six months to 31 October 2023. This was 8% higher than in the six
months to October 2022.
The source for all insolvency statistics are London and Regional Gazettes.
Corporate Finance (including Debt Advisory)
FRP Corporate Finance continued to invest in external and internal talent and
recently announced six promotions within the team, including two Partner
promotions. In addition, Tim Spooner joined as a Partner in the Bristol
office, and Victoria Kisseleva joined in London, with particular expertise in
the beauty and wellness sector.
Whilst deal volumes in the UK are down compared to the prior year - reflecting
the challenging conditions seen across the broader economy - the team remained
an active player in the mid-market, and closed 25 transactions in H1 2024,
with a combined value of £537m and raising £209m of debt (H1 2023: 40 deals
with a combined value of £1.2bn and raising £552m of debt).
Notable deals in H1 2024 included:
· The sale of CLC Group to HIG Group
· The sale of The Vegner Group to Odevo
· The refinancing of Bridge Farm Group
· A £33 million committed debt facility for Slater
& Gordon
Going into H2 2024, our pipeline of new opportunities remains robust and we
are continuing to see good levels of activity across the national Corporate
Finance practice. Whilst the mid-market in which we operate is appearing to
remain resilient - aided by the availability of capital and an eagerness to
deploy - there is a clear flight to quality. Investors are understandably
cautious and requiring additional diligence, meaning deals are taking longer
to complete but there are signs that confidence is returning, and we continue
to work closely with the PE community having closed transactions with 11
mid-market firms in H1 2024. As predicted, we are seeing signs of an increase
in debt refinancing and restructuring related M&A activity.
Forensic Services
Forensic Services have seen a high level of activity across both
investigations and disputes. We have seen more assignments requiring
forensic accounting support and have hired more staff across multiple
locations to meet the increase in demand for our services.
Financial Advisory
The team is actively engaged in a range of assignments including option
reviews and transaction due diligence, where stakeholders are seeking more
assurance on the viability of new investments and refinancing, given the
greater cost of capital and a higher risk environment.
Our valuation specialists have been active with both mainstream projects and
preparing valuations which underpin restructuring plans and schemes of
arrangement.
Our pensions advisory specialists continue to work with trustees and
corporates, increasingly those moving towards buying-out schemes with insurers
to secure member benefits after the recent changes in market conditions, as
well as those navigating the changing regulatory environment and its impact on
corporate transactions and scheme funding.
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.
As a professional services business, we understand that our people are central
to our success and our most valuable asset. As well as offering competitive
financial rewards, we offer opportunities for our team members to grow within
the business and reach their full potential. We believe highly engaged
colleagues deliver excellent client service and results, and in turn,
strengthen our reputation in the market.
We work hard to attract and retain highly skilled professionals by creating a
rewarding, high-performing environment. 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 622 as at 31 October 2023, representing 16% growth year-on-year,
set out in the table below.
31-Oct-23 30-Apr-23 31-Oct-22
Partners 88 78 80
Other Fee earners 396 361 342
Subtotal - Fee earners 484 439 422
Support 138 112 114
Total colleagues (ex Consultants) 622 551 536
In May 2023 the Group promoted a record 12 colleagues to Partner, part of a
total 72 promotions across locations and our five service pillars. Combined
with our ongoing investments in learning and development, this demonstrates
the Group's long-term commitment to developing talent and providing attractive
career paths. FRP have launched a new leadership programme for 100 colleagues
nationwide, which complements an existing programme, First in Leadership and
Management ("FILM").
In November 2023, we announced a further 33 promotions across our five service
pillars and within the Central Services teams, which included three new
Partners and six new Directors.
Four lateral hire Partners were appointed to our Bristol, London and
Manchester offices between September and November 2023.
In June 2023, we opened an additional office in Salisbury, to support
continued team and business growth from our Southampton office and the Wilson
Field acquisition brought a second new office, in Sheffield. Adding offices in
selective new locations is part of our growth strategy and as at October 2023,
we have 27 locations (H1 2023: 26) 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.
In September 2023, Glasgow Restructuring Partner, Michelle Elliot won
'Corporate Leader of the Year' at the Scottish Women's Awards.
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, team building and mental
wellbeing. FRP has consistent high level of staff retention compared to the
wider professional services industry (FRP voluntary attrition this half 10%,
H1 2023: 10%).
The Group has been progressing projects to improve operational efficiencies
and risk management, enhancing internal controls which include:
· Together with enhancements to the Group's Information Security
Management System ("ISMS"), we were formally awarded ISO 27001 accreditation
in October 2023. This confirms that FRP has put in place a system to manage
risks related to the security of data owned or handled by the Group and that
this system respects all of the best practices and principles enshrined in
this International Standard.
· The rollout of a new learning management system ("LMS"), and
continued planning around the launch of a document management System ("DMS").
· Updated finance system allows for improved efficiencies and
internal controls.
Environmental, Social and Governance ("ESG")
As we navigate the complexities of the present and look to the future, we
remain committed to improving our sustainability and climate resilience
efforts. Our alignment with the Task Force on Climate-related Financial
Disclosures ("TCFD") guidelines serves as evidence of our dedication to
understanding and effectively managing climate-related risks and
opportunities.
We recognise that improvements have to be made and after the appointment of a
specialist Sustainability Manager, Alexis Ioannidis in June 2023 our EcoVardis
rating was upgraded to Silver, putting FRP in the 87(th) percentile of
companies. During H1 2024, we have seen a 22% reduction in our Scope 1
emissions compared to the prior year (sourced from the use of a company car
fleet) and a corresponding 7% reduction in our Scope 2 emissions (sourced from
the generation of purchased electricity, heat and steam). We have also
improved our emissions estimate calculations to account for all Scope 3
categories and we are on track to publish a full emissions inventory, along
with our updated carbon reduction plan in 2024. Finally, we are launching a
waste reduction initiative in H2 2024 to reduce our office printing numbers.
In addition, Alexis works within our Financial Advisory pillar as a
sustainability consultant and is currently advising an investment
conglomerate.
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. For further details please see our website:
https://www.frpadvisory.com/about/approach/corporate-social-responsibility/environmental-social-and-governance/
(https://www.frpadvisory.com/about/approach/corporate-social-responsibility/environmental-social-and-governance/)
FRP is a member of the UN Global Compact, whose aim is to strengthen corporate
sustainability worldwide. Over 23,500 companies across 167 countries
participate and membership will assist FRP to commit to, assess, define,
implement, measure and communicate our sustainability strategy.
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. During H1 2024, we donated
£23,600 to our professional network's charity programmes, with colleagues
raising an additional £22,400. Notable colleague activities included
Manchester's Josh Richmond swimming the English Channel in a 6-person relay
team, collectively raising over £12,000 for the Children's Air Ambulance and
our London City office taking part in the Lord Mayor's Appeal Charity's 'City
Giving Day', raising £6,400, which included a matched donation from FRP. A
percentage of this total was distributed to the Appeal, with the remainder to
The Connection at St Martin's in the Fields.
Selective acquisitions
FRP's strategy is to generate sustainable profitable growth by combining a
focus on organic growth with acquisitions that meet the Group's selective
criteria. The three acquisition criteria we focus on are: cultural fit,
strategic fit (within our five pillars/growth region) and economic fit
(acceptable transaction economics).
The Wilson Field Group was acquired in September 2023 for £4.8m and this team
serve clients both locally in Sheffield and nationally through a digital
platform. Integration of the business continues as planned and their results
and contribution for the seven weeks post-acquisition are in line with the
Board's expectations.
Following an acquisition we treat the first 12 months' contribution to the
Group as inorganic, with contribution from month 13 onwards becoming organic.
A strong financial performance and continued discipline
The Group delivered another strong performance during H1 2024, continuing to
grow revenue and underlying adjusted EBITDA. The Group generated £58.7m in
revenue in H1 2024, up by 19% or £9.3m on the same period last year (H1 2023:
£49.4m), comprising organic growth of 16% and inorganic growth of 3%.
Underlying adjusted EBITDA was £15.5m, up 34% or £3.9m(H1 2023: £11.6m).
Reported profit before tax for the period increased by 105% to £11.5m (H1
2023: £5.6m) and was in line with the Board's expectations. This was driven
by both revenue increases and a stable cost base. Converting unbilled revenue
(also known as work in progress or "WIP") to cash remains a top priority,
however our success in winning larger, more complex assignments can extend the
working capital cycle. As our activity levels have increased, there has been
an expected growth in our unbilled revenue although we have consistently
maintained our discipline around appropriate valuation. The increase has
arisen as FRP has been appointed on new, large and/or complex administration
assignments that have assets other than cash (i.e. property) and/or a longer
creditor approval process before fees can be drawn. FRP continues to have a
strong track record of converting WIP into cash.
Dividend
Due to our continued profitability and cash position, in line with our stated
dividend policy, the Board declares an interim dividend for Q2 2024 of 0.9p
per eligible ordinary share. This dividend will be paid on 22 March 2024 to
shareholders on the Company's register on 23 February 2024, with an
ex-dividend date of 22 February 2024. This dividend takes the total for H1
2024 to 1.8p per eligible share (H1 2023: 1.7p).
Going concern
During H1 2024, FRP has continued to grow profitably. The Group had net cash
of £11.7m (H1 2023: £21.0m) and an undrawn RCF of £10m as at 31 October
2023. Net cash is calculated based on £15.7m gross cash less £4.0m of
structured debt (repayable over approximately two and a half years). The Group
also has an accordion acquisition facility of £15m.
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 throughout the
economic cycle. 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.
The Restructuring Team are considerably more active this half compared to the
same period a year ago and have increased administration market share.
Companies with significant borrowings who have rolled off lower interest rate
arrangements are now subject to much higher debt service costs, with interest
rates now considerably higher than the 2009-2021 period. Businesses are also
exposed to much higher levels of cost inflation. FRP continues to be one of
the most active Restructuring Advisory businesses in the UK, supporting
clients on both stress and distress situations where we create commercial
solutions to achieve the best possible outcome. Certain sectors such as
construction, property, casual dining and food service, retail, administrative
and support services are finding current trading conditions particularly
challenging.
The Forensic services team is expanding, and are seeing an increase in demand
for support on disputes and investigations, often driven by fraud related
matters or the need for independent investigations.
Financial Advisory are supporting on range of assignments including option
reviews and transaction due diligence, where stakeholders are seeking more
assurance on the viability of new investments and re-financing given the
greater cost of capital and a higher risk environment. Our valuation
specialists have been active with both mainstream projects and preparing
valuations which underpin restructuring plans and schemes of arrangements.
FRP Corporate Finance (including Debt Advisory) remains active in the
mid-market and have a healthy H2 pipeline, although increased caution among
investors and lenders in the current environment is also driving an increase
in due diligence which means deals are taking longer to complete. There is
also an increase in debt refinancing and restructuring related M&A
activity.
The group has a strong balance sheet and available facilities to support
continued growth.
Trading to date has been positive and the Board expects to exceed current
consensus market expectations for FY 2024. If current activity levels continue
the Board expects the Company to deliver revenue of £123m and adjusted EBITDA
of £32m for FY 2024.
Geoff Rowley
Nigel Guy
Chief Executive Officer
Non-Executive Chairman
Underlying adjusted results
For the six months ended 31 October 2023
Calculation of underlying adjusted EBITDA
(Earnings Before Interest Tax Depreciation and Amortisation)
£m H1 2024 (restated) FY 2023
H1 2023
Reported profit before tax (PBT) 11.5 5.6 15.6
Add interest, depreciation, amortisation 1.7 1.4 2.9
Reported EBITDA 13.2 7.0 18.5
Add exceptional items - 0.1 0.1
Add share-based payment expense relating to the Employee Incentive Plan 1.6 3.3 6.3
Add share-based payment expense - deemed remuneration 0.7 1.2 2.1
Underlying adjusted EBITDA 15.5 11.6 27.0
At present the Company has expensed in H1 2024 but not underlying adjusted
EBITDA for:
Ø Employers National Insurance due to the EIP awards when the options vest,
£0.4m (H1 2023: £0.9m) accrued in the period.
Consolidated statement of comprehensive income
For the six months ended 31 October 2023
Unaudited Restated Audited
Unaudited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Notes £ million £ million £ million
Revenue 58.7 49.4 104.0
Personnel costs (33.0) (32.3) (64.3)
Depreciation and amortisation (1.3) (1.2) (2.5)
Other operating expenses (12.5) (10.0) (21.1)
Exceptional costs 3 - (0.1) (0.1)
Operating profit 11.9 5.8 16.0
Finance income 0.2 0.1 0.2
Finance costs (0.6) (0.3) (0.6)
Net finance costs (0.4) (0.2) (0.4)
Profit before tax 11.5 5.6 15.6
Taxation (2.7) 0.3 (2.9)
Profit for the period 8.8 5.9 12.7
Total comprehensive income for the period 8.8 5.9 12.7
Earnings per share (in pence)
Total 4 3.53 2.38 5.13
Basic 4 3.76 2.68 5.58
Diluted 4 3.64 2.50 5.33
Adjusted earnings per share (in pence)
Total 4 4.20 3.35 7.83
Basic 4 4.49 3.76 8.52
Diluted 4 4.34 3.51 8.14
All results derive from continuing operations.
Consolidated statement of financial position
For the six months ended 31 October 2023
Restated
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Notes £ million £ million £ million
Non-current assets
Goodwill 12.7 10.2 10.8
Other intangible assets 2.3 0.7 0.6
Property, plant and equipment 2.5 2.7 2.5
Right of use asset 6.0 5.6 6.5
Deferred tax asset 1.6 4.7 2.5
Total non-current assets 25.1 23.9 22.9
Current assets
Trade and other receivables 6 68.5 48.5 58.3
Cash and cash equivalents 15.7 26.6 27.7
Total current assets 84.2 75.1 86.0
Total assets 109.3 99.0 108.9
Current liabilities
Trade and other payables 7 26.6 26.1 29.7
Loans and borrowings 1.6 1.6 1.6
Lease liabilities 1.6 1.7 1.2
Total current liabilities 29.8 29.4 32.5
Non-current liabilities
Trade and other payables 7 5.1 5.4 4.8
Loans and borrowings 2.4 4.0 3.2
Lease liabilities 4.5 4.0 5.3
Total non-current liabilities 12.0 13.4 13.3
Total liabilities 41.8 42.8 45.8
Net assets 67.5 56.2 63.1
Equity
Share capital 0.2 0.2 0.2
Share premium 33.7 31.5 32.0
Treasury shares reserve (0.0) (0.0) (0.0)
Share-based payment reserve 1.9 2.9 1.3
Merger reserve 1.3 1.3 1.3
Retained earnings 30.4 20.3 28.3
Shareholders equity 67.5 56.2 63.1
Approved by the Board and authorised for issue on 11 December 2023.
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 2023
Called up share capital Treasury share reserve Share-based payment reserve Merger reserve Retained earnings Total equity
Share premium account
£ million £ million £ million £ million £ million £ million £ million
Balance at 31 October 2022 (unaudited) (restated) 0.2 31.5 (0.0) 2.9 1.3 20.3 56.2
Profit for the half year - - - - - 6.8 6.8
Other movements - - 0.0 - - (0.0) -
Dividends - - - - - (3.8) (3.8)
Issue of share capital 0.0 0.5 - - - - 0.5
Share-based payment expense - - - 3.0 - - 3.0
Deemed remuneration additions - - - (1.0) - - (1.0)
Deemed remuneration charge - - - 1.4 - - 1.4
Transfer to retained earnings - - - (5.0) - 5.0 -
Balance at 30 April 2023 (audited) 0.2 32.0 (0.0) 1.3 1.3 28.3 63.1
Profit for the half year - - - - - 8.8 8.8
Dividends - - - - - (6.7) (6.7)
Issue of share capital 0.0 1.7 - - - - 1.7
Other movements - - 0.0 - - (0.0) -
Share-based payment expense - - - 1.6 - - 1.6
Deemed remuneration additions - - - (1.7) - - (1.7)
Deemed remuneration charge - - - 0.7 - - 0.7
Balance at 31 October 2023 (unaudited) 0.2 33.7 (0.0) 1.9 1.3 30.4 67.5
Consolidated statement of cash flows
For the six months ended 31 October 2023
Unaudited Restated Audited
Unaudited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
£ million £ million £ million
Cash flows from operating activities
Profit before taxation 11.5 5.6 15.6
Depreciation, amortisation and impairment (non cash) 1.3 1.2 2.5
Share-based payments: employee options (non cash) 1.6 3.3 6.3
Share-based payments: deemed remuneration (non cash) 0.7 0.7 2.1
Net finance expenses 0.4 0.2 0.4
Increase in trade and other receivables (7.5) (2.6) (11.6)
Decrease in trade and other payables (1.5) (5.1) (2.2)
Tax paid (5.4) (0.2) (2.0)
Net cash from operating activities 1.1 3.1 11.1
Cash flows from investing activities
Purchase of tangible assets (0.2) (0.3) (0.6)
Acquisition of subsidiaries less cash acquired (4.1) (0.4) (1.6)
Interest received 0.2 0.0 0.2
Net cash used in investing activities (4.1) (0.7) (2.0)
Cash flows from financing activities
Gross Proceeds from share sales - 7.5 7.5
Dividends (6.8) (6.0) (9.8)
Principal elements of lease payments (1.0) (0.7) (1.4)
Repayment of loans and borrowings (0.8) (1.2) (2.0)
Interest paid (0.4) (0.3) (0.6)
Net cash used in financing activities (9.0) (0.7) (6.3)
Net (decrease)/increase in cash and cash equivalents (12.0) 1.7 2.8
Cash and cash equivalents at the beginning of the period 27.7 24.9 24.9
Cash and cash equivalents at the end of the period 15.7 26.6 27.7
Notes to the Financial Statements
For the six months ended 31 October 2023
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
financial 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 2024 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 2023 were approved by the
Board of Directors on 25 July 2023 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 2023.
FRP Advisory Group plc is the 100% shareholder of FRP Advisory Trading
Limited. FRP Advisory Trading Limited has twelve wholly owned subsidiaries,
FRP Advisory Cyprus, APP Audit Co Limited, FRP Debt Advisory Limited, FRP
Corporate Finance Limited, FRP Corporate Advisory Limited, Litmus Advisory
Limited, Abbott Fielding Limited, JDC Accountants & Business Advisors
Limited, JDC Holdings Limited, Spectrum Corporate Finance Limited,
BridgeShield Asset Management Limited and Wilson Field Group 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. Wilson Field Group limited
has two subsidiaries, Wilson Field Limited and WF Financial Solutions. FRP has
100% of the economic interest in JDC Accountants & Business Advisors Ltd
and APP Audit Co Limited.
2.2 Significant accounting policies
Accounting policies adopted in preparation of the H1 2024 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 2023.
2.3 Going concern
The business has been, and is currently, both profitable and cash generative.
It has consistently grown year on year and has proven to be resilient, growing
in both periods of economic growth and recession.
At period end the Group had net cash of £11.7m. 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 period results
The restatement of prior period results is the
reclassification of £0.2m of costs relating to the issue of share capital
from exceptional costs to offsetting with share premium.
3. Exceptional costs
Exceptional costs in the prior period 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 2024 H1 2024 H1 2023 H1 2023
Reported Profit after tax 8.8 8.8 5.9 5.9
Add Exceptional items - - - 0.1
Add Share-based payments - 2.3 - 4.5
Less deferred tax - (0.6) - (2.2)
Adjusted Profit after tax 8.8 10.5 5.9 8.3
Total average shares in issue 249,813,394 249,813,394 247,448,913 247,448,913
Total share EPS (pence) 3.53 4.20 2.38 3.35
Weighted average shares in issue excluding EBT 234,015,204 234,015,204 220,504,872 220,504,872
Basic EPS (pence) 3.76 4.49 2.68 3.76
Dilutive potential ordinary shares under share option schemes 7,827,995 7,827,995 15,213,834 15,213,834
Weighted diluted shares in issue 241,843,199 241,843,199 235,718,706 235,718,706
Diluted EPS (pence) 3.64 4.34 2.50 3.51
The Employee Benefit Trust does not have an entitlement to dividends, holding
15,798,190 (H1 2023: 26,944,041) shares of the above 249,813,394 (H1 2023:
247,448,913) ordinary shares.
5. Dividend
The Board declared an interim dividend for Q2 2024, the period to 31 October
2023 of 0.9p per eligible* share. This dividend will be paid on 22 March 2024
to shareholders on the Company's register on 23 February 2024, with an
ex-dividend date of 22 February 2024.
*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. The options vested from March 2023 onwards, and gain rights to
dividends.
6. Trade and other receivables
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Trade and other receivables £ million £ million £ million
Trade receivables 7.6 6.0 7.9
Other receivables 4.5 2.4 4.6
Unbilled revenue 56.4 40.1 45.8
68.5 48.5 58.3
The ageing profile of non-related party trade receivables is as follows:
As at As at As at
31 Oct 23 31 Oct 22 30 Apr 23
Due in £ million £ million £ million
<30 Days 5.0 3.0 4.1
30-60 Days 0.3 1.0 1.6
60-90 Days 0.3 0.3 0.8
>90 Days 2.0 1.7 1.4
Total 7.6 6.0 7.9
7. Trade and other payables
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Current liabilities £ million £ million £ million
Trade payables 3.0 0.7 1.9
Other taxes and social security costs 4.0 5.7 8.4
Liabilities to Partners go forward 11.4 10.9 10.3
Other payables and accruals 8.2 8.8 9.1
26.6 26.1 29.7
Unaudited Unaudited Audited
6 months ended 6 months ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Non-current liabilities £ million £ million £ million
Other payables and accruals 0.6 1.1 0.7
Partner capital 4.5 4.3 4.1
5.1 5.4 4.8
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 DGBDDBGBDGXBRecent news on Frp Advisory
See all newsREG - FRP Advisory Grp PLC - Directorate Change
AnnouncementREG - FRP Advisory Grp PLC - Total Voting Rights
AnnouncementREG - AIM - AIM Notice - 13/03/2024
AnnouncementREG - FRP Advisory Grp PLC - Acquisition of GWC
AnnouncementREG - FRP Advisory Grp PLC JTC PLC - Holding(s) in Company
Announcement