REG - Public Policy Hldg - Business Update

Public Policy HoldingAnnouncement

19/06/2023 07:00

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RNS Number : 0632D  Public Policy Holding Company, Inc.  19 June 2023

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

 

Public Policy Holding Company, Inc.

 

("PPHC", the "Group" or the "Company")

 

Business Update

 

 Public Policy Holding Company, Inc., the government relations and public
affairs group providing clients with a fully integrated and comprehensive
range of services, is pleased to provide an update on its M&A pipeline,
current trading and employee shareholding.

 

M&A pipeline and strategy

 

Following the successful completion of the earnings accretive acquisitions of
KP Public Affairs in October 2022 and MultiState Associates in March 2023, the
Group has seen a marked acceleration in its pipeline of M&A opportunities
and looks forward to updating shareholders in the second half of the year to
the extent these current opportunities crystallise.

 

The Group's stated M&A strategy includes its desire to add certain
complementary specialisations to its portfolio, as well as to expand its
footprint both in the United States and internationally into the EU and UK.

 

The Group continues to adopt a disciplined approach to its M&A strategy
with a focus on:

 

·    Best in class ethical and compliance standards in place at target
companies;

·    Resultant market share and diversification benefits;

·    Attractive financial profiles;

·    Long term revenue synergy potential;

·    Sufficient level of scale and institutionalisation; and

·    Negotiating deal structures that align the owners of the target with
the Group in the long term and deliver shareholder value.

 

Current trading

 

The Group reiterates existing guidance for FY23 and expects organic growth for
the year to be 5% to 10%. Overall, management expects revenue growth for the
year of between 20% and 30%, factoring in the incremental contribution from KP
Public Affairs and Multistate Associates.

 

The Group continues to manage the business such that the Underlying EBITDA
margin is expected to be between 25% and 30% on a full year basis. The Group
saw moderated growth in Q1 primarily as a result of delays in U.S. Congress
formation, however Q2 to date has been strong. H1 margins are therefore
anticipated to be marginally below 25%, which is expected to reverse through
H2. Management retains immediate and long-term confidence in the Group's
growth and margin prospects.

 

Dividend and cash

 

Following the payment of the FY22 final dividend of $10.6m on 2 June 2023, the
Group had gross cash on its balance sheet of $4m and $13m debt outstanding
under its $17m credit facility with Bank of America, N.A., resulting in a net
debt position of $9m. The Group continues to accumulate cash on a monthly
basis and the next dividend is due to be paid in October 2023 following the
announcement of the interim results for the six months ending 30 June 2023.

 

The Group views its current dividend policy and the payment of semi-annual
dividends as a key tool in the alignment of its internal (employee)
shareholders and external shareholders and as validation of the strong free
cash flow generation of the business.

 

The Group expects to announce its interim results for the six months ending 30
June 2023 in September 2023.

 

Employee Shareholding

 

As at the date of the Group's IPO on 16 December 2021, an aggregate of
80,354,500 shares (74.2% of total issued shares at admission) were held by
employee shareholders and subject to a five-year vesting schedule with vesting
occurring in equal instalments on each of the first five anniversaries from
admission. Following the first vesting on 16 December 2022, no employee-owned
shares have been sold and those employees are now unable to sell due to the
current blackout period until after the release of the Group's interim
results. Management views this stable employee shareholding situation as a
testament to the belief the Group's employees hold in the Group's future
prospects.

 

 

 

Enquiries

 Public Policy Holding Company Inc.         +1 (202) 688 0020

 Stewart Hall, CEO

 Bill Chess, CFO

 Thomas Gensemer, Chief Strategy Officer

 Roel Smits, Deputy CFO

 Stifel (Nominated Adviser & Broker)        +44 (0) 20 7710 7600

 Fred Walsh, Tom Marsh

 Buchanan Communications (Media Enquiries)  +44 (0) 20 7466 5000

                                          pphc@buchanan.uk.com (mailto:pphc@buchanan.uk.com)
 Chris Lane, Toto Berger

 

About PPHC

Incorporated in 2014, PPHC is a US-based government relations and public
affairs group providing clients with a fully integrated and comprehensive
range of services including government and public relations, research and
digital advocacy campaigns. Retained by over two-thirds of its 1000+ clients,
including corporates, trade associations and non-governmental organisations,
the Group is active in all major sectors of the U.S. economy, including
healthcare and pharmaceuticals, financial services, energy, technology,
telecoms and transportation. PPHC's services support clients to enhance and
defend their reputations, advance policy goals, manage regulatory risk, and
engage with US federal and state-level policy makers, stakeholders, media and
the public.

 

PPHC operates a holding company structure and currently has seven operating
entities comprising Crossroads Strategies, Forbes Tate Partners, Seven Letter,
O'Neill & Associates, Alpine Group Partners, KP Public Affairs and
MultiState Associates. Operating in the strategic communications market, the
Group has a strong track record of organic and acquisitive growth, the latter
focused on enhancing its capabilities and to establish new verticals, either
within new geographies or new related offerings.

 

For more information, see www.pphcompany.com (http://www.pphcompany.com/) .

 

 

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