REG - FRP Advisory Grp PLC - Half Year Trading Update

Frp AdvisoryAnnouncement

20/11/2024 07:00

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RNS Number : 8712M  FRP Advisory Group PLC  20 November 2024

FRP Advisory Group plc

("FRP" or the "Group")

 

Half Year Trading Update

 

FRP Advisory Group plc, a leading national specialist business advisory
firm, announces a trading update for the half year ended 31 October 2024 ("H1
2025").

 

Strong first half performance

 

The Group's performance was strong during the first half, with continued
growth in revenues and profits, and further investment in the team.

 

The Group expects to report revenue for H1 2025 of £77.6m, up 32% on the
prior year (H1 2024: £58.7m), and underlying adjusted EBITDA* of £22.3m, up
44% on the prior year (H1 2024: £15.5m).

 

Revenue growth comprised 23% of organic growth and 9% of inorganic, the latter
defined as an acquisition's first 12 months' contribution to the Group. During
the half, four acquisitions were completed across three service pillars.

 

Restructuring

 

The first half began well with the completion of a number of notable projects,
including The Body Shop.

 

The UK general election in July 2024 was followed by a three-month period of
economic stagnation in the UK, with uncertainty in advance of the new
government's budget delaying decision making. During this pre-budget period,
there was a spike in the number of solvent liquidations.

 

The increase in employers' National Insurance Contributions announced in the
recent budget is likely to put further pressure on businesses with large
workforces and lower margins. The retail and hospitality sectors in
particular, which were already navigating post-Covid debt service and other
inflationary cost pressures, are expected to face additional financial
challenges.

 

Corporate Finance and Debt Advisory

 

FRP Corporate Finance has continued to invest in both external and internal
talent. It expanded its geographical footprint in the period with the
acquisitions of Lexington Corporate Finance (based in Cardiff) and Williams
Ali (based in Newcastle). Both businesses will trade as FRP Corporate
Finance.

Moving into H2 2025, the pipeline of new opportunities remains solid, as
uncertainty moderates and sentiment stabilises following the budget. We
continue to see good levels of activity with signs of an increase in debt
refinancing and restructuring related M&A activity.

Early in the first half FRP also acquired The Hilton-Baird Group, which sits
within the Debt Advisory Pillar. Based in Southampton it operates nationally
and provides commercial finance brokerage, outsourced risk and receivables
audit, as well as credit management and commercial debt collection services; a
key client group is Asset-Based Lenders (ABLs). Trading is as expected.

Forensic Services

The Forensic Services market has been relatively buoyant in the period,
especially in litigation and contentious insolvency related matters. The Group
has continued to expand its service offering by bolstering the team, including
with the hire of a Forensic Services Partner in our new Belfast office.

 

Financial Advisory

 

Anticipation of the new government's budget drove an increase in activity in
the transaction services market, which FRP's Financial Advisory pillar was
well-placed to support. This principally resulted in an increase in buyside
Financial Due Diligence (FDD) mandates, business valuations and pre-lending
mandates.

Financial Advisory continues to support cross-pillar initiatives and increase
its national coverage. The valuation team doubled following the Globalview
acquisition in October 2024 and FRP now offers a broader range of valuation
services to clients.

*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.

 

Balance sheet strength

 

The Group's balance sheet remains strong with an unaudited net cash balance as
at 31 October 2024 of £13.3m** (31 October 2024: £11.7m). The Group also has
an undrawn RCF of £10 million and an accordion acquisition facility with
Barclays Bank.

 

**£22.2 gross cash less £8.9m of structured debt (31 October 2024: £15.7m
less £4m), repayable over approximately three years.

 

Continued investment in enhancing the team

 

FRP's offices routinely collaborate, deploying the right team of specialists
for each assignment to deliver optimum solutions.

To ensure capacity and expertise aligns with demand, the Group has selectively
expanded its headcount during the half, with the total number of Colleagues
growing by 18% over H1 2025 (25% year-on-year) including acquired colleagues.

 

Outlook

 

Trading since 1 May 2024 has been positive, including a strong contribution
from The Body Shop case and the completion of a large Corporate Finance
project. The pipeline remains encouraging, and assuming current activity
levels continue, the Board remains confident of achieving full year
expectations.***

 

***The Company believes consensus market expectations for FY 2025 to be
revenue of £146.7m and adjusted EBITDA of £39.5m.

 

 

Geoff Rowley, Chief Executive Officer of FRP Advisory Group plc, said:

 

"FRP has delivered another strong performance in the first half of the year,
reporting increased revenue and profits. In line with our proven strategy, we
continued to be acquisitive, strengthening the Group with four acquisitions
across three of our service pillars. In doing so, we have enhanced our
offering and are even better positioned to provide optimum solutions for our
clients.

 

"I am confident that we will make further progress in the remainder of the
year, as we support corporates through the entire business cycle."

 

 

 

Notice of results

 

The Group expects to report its unaudited results for the half year ended 31
October 2024 on 17 December 2024.

 

The information contained within this announcement is deemed by the Group to
constitute inside information under the Market Abuse Regulation No. 596/2014.

 

 

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

Eleni Menikou

Lexi Iles

Tel: +44 (0) 7701 308 818

FRP@mhpgroup.com (mailto: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.

 

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