REG - RBG Holdings PLC - Unaudited Interim Results
16 September 2020
RBG Holdings plc
("RBG", the "Group", or the "Company")
Unaudited Interim Results for the period ended 30 June 2020
RBG Holdings plc (AIM: RBGP), the professional services group, is pleased to announce its unaudited results for the six months ended 30 June 2020.
Overview
The Group has continued to trade profitably during the period, which included the coronavirus crisis, led by its law firm Rosenblatt Limited ("RBL"). RBL was the primary source of revenue from legal services, which was up 42% on the previous six-month period.
There have been no cash realisations from litigation investment sales of the Group's investment assets during the period (2019: £2.0 million) while the Group created and launched a new separately branded business for its third-party litigation finance investments, now called LionFish Litigation Finance (UK) Limited ("LionFish"). Furthermore, the crisis has meant that Convex Capital Limited ("Convex Capital"), the Group's M&A business, has seen deals delayed and some cancelled, albeit the outlook is now improving.
The reduction of these two high margin revenue streams has impacted the Group's profitability in the first six months. However, much of this revenue has been deferred and the Group is well positioned for litigation investment sales and targeting M&A deals to be completed in the second half of the current financial year.
Having reviewed the current half year results, the Board has decided to postpone the decision regarding any dividend until the year end when it expects to have better visibility on the Group's performance for 2020 and wider economic indicators.
Group Financial Highlights:
· Revenue and realised gains (including no realised gains) of £12.0 million, up 17% (2019: £10.2 million including £2.0 million of realised gains)
· EBITDA of £2.6 million (2019: £3.8 million including realised gains of £2.0 million)
· Profit before tax of £1.4 million (2019: £3.2 million)
· Profit after tax of £1.2 million (2019: £2.6 million)
· Earnings per share: 1.35 pence (2019: 3.19 pence)
· Net debt of £1.6 million (2019: net cash of £8.7 million) reflecting increased investment in contingent legal work and litigation investments. The Group has a £10 million revolving credit facility which it has drawn down.
· As at the 30 June 2020, the Group through RBL and LionFish, has invested in 8 litigation cases. There is a total associated contingent work in progress (WIP) of £3.8 million and a total cash investment of £3.7 million in these cases across RBL and LionFish. By the 15 September 2020, the Group through LionFish had invested in a further 3 cases, 11 in total with total cash investments of £4.7 million
· No cash realisations from litigation investment sales in the period. Well positioned to achieve sales in the second half, building on sales of £3.8 million in 2019.
Business Highlights:
RBL (law firm)
· Revenue from legal services was up 42% to £11.7 million (2019: £8.2 million)
· Unrecognised contingent WIP was £0.9 million in addition to £11.7 million of actual revenue
· Dispute Resolution division is performing well with revenue up 13%.
· Revenue from the Corporate division up 335% to £3.3 million, greater than the whole of 2019 (HY 2019: £0.8 million; FY 2019: £2.0 million)
· Average revenue per fee earner £497,000 (2019: £350,000)
· Total Lockup was 114 days (2019: 118 days) of which debtor days were 49 (2019: 47)
· As at 15 September 2020, RBL has invested in 8 litigation cases with an associated contingent WIP of £3.8 million, and total cash investments of £4 million.
LionFish (Litigation Finance)
· The Group created a separately branded business for its third-party litigation finance business which it launched in May 2020 - LionFish Litigation Finance (UK) Limited
· Industry expert Tets Ishikawa appointed as Managing Director
· As at 15 September 2020, LionFish has approved six cases with a funding commitment of £2.36m and executed three with £0.7 million invested to date. Since launch, LionFish has received 112 matters for possible funding, of which six were approved and 23 still under active review.
· LionFish launched ISLERO in July 2020 - a new generation of financing solutions for insolvency claims.
· The outlook for LionFish is good with a strong pipeline of cases looking for finance.
Convex Capital (Specialist sell-side M&A boutique)
· Impacted by Covid-19 with deals delayed and some cancelled. However, M&A activity is beginning to increase, and the business is targeting a number of second half completions
· Revenue of £0.3 million equates to one completed transaction and an additional fee from a previous deal based on deferred performance
Nicola Foulston, CEO, RBG Holdings plc, commented: "Overall, there has been positive strategic and operational progress across the Group which has helped offset the negative impact of the coronavirus and has resulted in a stronger platform from which to drive future growth. The business, especially our law firm RBL, has proved incredibly resilient despite the recent upheaval. Our staff adapted quickly to remote working and work proceeded as planned across all practice areas.
Furthermore, we received a high volume of new instructions as a result of client need for financial restructuring and employment-related issues as a result of the pandemic. In addition, our Corporate division which had been subdued because of the uncertain economic environment caused by Brexit has performed exceptionally strongly alongside our Dispute Resolution practice.
"In May, we launched our new Litigation Finance business called LionFish to finance third-party litigation. Partly because of this, there were no litigation sales in the first six months. We expect these to return in the second half with a number of tangible opportunities well progressed. We are also reviewing a growing number of cases for possible finance, and launched a new product aimed at insolvency claims, ISLERO. Our M&A business, Convex Capital was the part of the Group most impacted by the lockdown with deals delayed and some cancelled. However, as the lockdown eases, we are beginning to see the return of M&A activity which should positively impact the second half performance.
"While the Group has seen strong revenue growth overall, driven by the law firm, our profitability has reduced. This should mainly be a timing issue if our plan to achieve higher margin profit from LionFish's litigation investment realisations and Convex Capital's fees in the second half is realised. Like all businesses, it is difficult at this stage to predict with certainty what will happen in the coming months. However, there is a growing demand for our legal services with many clients turning to us to help them manage issues during the crisis. With the potential return of the higher-margin litigation investment sales and M&A fees, we look forward to the coming months with cautious optimism."
Enquiries:
RBG Holdings plc
Nicola Foulston, CEO
Via Newgate Communications
N+1 Singer (Nomad and Broker)
Shaun Dobson / Alex Bond (Corporate Finance)
Tom Salvesen (Corporate Broking)
Tel: +44 (0)20 7496 3000
Newgate Communications (for media enquiries)
Robin Tozer/Tom Carnegie
Tel: +44 (0)20 3757 6880; rbg@newgatecomms.com
About RBG Holdings plc
RBG Holdings plc is a professional services group, which includes one of the UK's pioneering law firms, Rosenblatt Limited, which is a leader in dispute resolution.
Rosenblatt Limited provides a range of legal services to its diversified client base, which includes companies, banks, entrepreneurs and individuals. Complementing this is the Company's increasingly international footprint, advising on complex cross-jurisdictional matters. Rosenblatt Limited's practice areas include dispute resolution, financial crime, corporate, banking and finance, insolvency and financial restructuring, construction and projects, employment, financial services, IP/technology/media, real estate, regulatory and tax resolution. The Group also provides litigation finance in selected cases through a separate arm.
The Group also owns Convex Capital Limited, a specialist sell-side corporate finance boutique, based in Manchester. Convex is entirely focussed on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates. Convex identifies and proactively targets firms that it believes represent attractive acquisition opportunities.
Chief Executive's Statement
Overview
The Company has evolved into a broader high-quality professional services group, with a pioneering law firm at its heart, Rosenblatt (RBL); an ambitious Litigation Finance business, LionFish Litigation Finance (UK) Limited (LionFish); and a disruptive M&A business, Convex Capital. The strategy of the Group is clear: we want to leverage our core professional services businesses of RBL and Convex Capital and capitalise on those areas of the business that offer maximum returns. We use the expertise within those businesses to maximise the potential returns by selectively investing in contingent asset classes such as litigation and generate revenue through the sale of participation rights in these assets, as well as reducing risk.
I am pleased to report that the Group has performed well despite the challenges of the coronavirus. Our law firm RBL, has led the way with strong revenue growth driven by our Dispute Resolution and Corporate divisions, with work delivered at the high margins on which we focus.
As a result of the strong performance of RBL, our revenue for the period (which included no realised gains) was still up at £12.0 million (2019: £10.2 million) attracting gross margins of 48%.
Our sell-side M&A boutique, Convex Capital was the most impacted part of the Group as a result of Covid-19. Deals were delayed and some cancelled. However, M&A activity is beginning to increase which should result in some completions, and therefore fees, in the second half.
In the short term, the lack of litigation investment sales and M&A fees from Convex Capital has impacted the Group's profitability. Group EBITDA was £2.6 million (2019: £3.8 million) at a margin of 22%. As previously disclosed, we target a margin of 35% or more, and we are aiming to achieve a higher net margin by the year end. The Group's profit before tax was £1.4 million (2019: £3.2 million) and profit after tax was £1.2 million (2019: £2.6 million).
Our balance sheet remains satisfactory. Our net debt position was £1.6 million versus net cash of £8.7 million in 2019. This change reflects the investment in Convex Capital and the increased investment in contingent legal work. This was not offset by litigation investment sales. The Group's strategy is to use our extensive litigation expertise to de-risk our investments and deliver a net positive cash position. We are planning for a significant return of litigation investment sales in the second half. The Group has a £10 million revolving credit facility available to fund the timing difference.
Our balance sheet will support our long-term growth plans, including acquisitions, continued investment in litigation investment opportunities, and future dividends.
Rosenblatt Limited ("RBL")
During the first six months, RBL continued to successfully serve its clients remotely, winning a broad range of new instructions, including corporate transactions, employment advisory work and financial restructuring mandates.
Due to this strong demand, revenue from fees earned by RBL in the first six months were up 42% to £11.7 million (2019: £8.2 million). The Dispute Resolution division, which is responsible for 61% of RBL's revenue, performed well with revenue up 13% to £7.1 million (2019: £6.3 million).
In 2019, the Corporate division, which is focused on commercial transactions, saw reduced billings due to the impact of the cautious business environment caused by Brexit uncertainty. Following the decisive election result, the Group was beginning to see a significant increase in the number of live transactions as client confidence returned to pre-Brexit levels. This progress has continued despite the lockdown, with revenue from the Corporate Division up 335% to £3.3 million, which is greater than the whole of 2019 (HY 2019: £0.8 million; FY 2019: £2.0 million).
As well as the financial metrics, the other KPIs the Board focuses on have also performed well. Average revenue per fee earner was £497,000 (2019: £350,000) reflecting the high productivity of RBL. Total lockup was 114 days (2019: 118 days) of which debtor days were 49 (2019: 47) with the slight increase resulting from the increased number of corporate clients that have slowed payment.
The strategy I have set in place and the strength of the balance sheet as a result of the IPO has allowed the Group to increase the amount of contingent work that it can take on, if the cases pass the strong legal and commercial review process that is in place. Importantly, RBL can enter into more Alternative Billing Arrangements (ABA), which can generate incremental margins on a successful case outcome. No revenue is recognised until the result of the event has occurred. Such revenue is considered contingent.
During the first six months of 2020, RBL invested £1.6 million in 8 cases. The amount of contingent work carried out by RBL during the period was worth £0.9 million (2019: £1.3 million). As at 15 September 2020, RBL has invested a total of £4 million in 8 cases, with a total contingent WIP of £3.8 million.
LionFish Litigation Finance (UK) Limited ("LionFish")
Since the Group's IPO in May 2018, litigation finance has been an important pillar of the Group's overall strategy. The Group initially invested in RBL's own client matters but on 1 May 2020, the Group launched LionFish Litigation Finance (UK) Ltd. LionFish finances litigation matters being run by other solicitors in return for a significant return on the outcome of those cases. As such, the Group now have two types of litigation investments - RBL's own client matters, and litigation matters run by third-party solicitors.
Both types of litigation investments not only have significant return potential, but they represent an opportunity to extract further value from the Group's legal and commercial expertise and diversify its income streams. RBL has a proven track record evaluating the legal merits of any litigation matter to optimise its own profits. By leveraging this capability and marrying it with the origination capabilities of LionFish and our strong commercial management team, the Group can identify third party litigation cases and make investments with strong risk-adjusted returns.
This creates further revenue potential from our Litigation Finance sales business beyond RBL's own client matters. While litigation finance sales help de-risk or risk manage the Group's overall litigation investment exposure, it is also part of a plan to create a secondary market for litigation investments.
The Board believes it is important to reiterate the conservative approach we adopt towards the handling of, and accounting for, our litigation investments. We judge the fair value of investments to be equal to or as close to cost, which means we do not account for unrealised gains, as well as having rules limiting the Group's cash and revenue exposure.
The Group appointed seasoned litigation finance expert, Tets Ishikawa, as Managing Director of LionFish at launch. LionFish is positioned to be a unique, alternative provider to the traditional funders, who are essentially third-party money managers of institutional investment capital. Free from deployment pressures, return hurdles and other restrictive parameters, LionFish can act more commercially and sensibly as a principal investor. In particular, it has been able to position itself as a provider of innovative, practical financing solutions, known for intelligent pricing solutions which are better aligned with the risk profiles of litigation cases and a decision-making process which is considerably faster than market practice.
This has been reflected in a very successful start to the business, where from a standing start, LionFish received 112 enquiries for funding by 15 September 2020. Beyond the 23 cases in active review at that time, LionFish had approved six cases and executed three transactions with a total commitment of £2.4 million with £0.7 million advanced.
Furthermore, in July 2020, LionFish launched ISLERO, a new generation of financing solutions for insolvency claims, designed to answer the increasing calls of insolvency practitioners and solicitors for cheaper, faster and more flexible financing solutions than are currently available. Over the last decade, the market for financing of insolvency claims has become well-established but has been largely limited to one major player taking a majority market share. This has stunted the evolution of financing products available to insolvency claims, especially in terms of pricing. Over the next 12 months, we expect ISLERO to take share from the dominant market player and further add to LionFish's portfolio of litigation investments.
Following a strong start, the Group is very excited about the potential for litigation investment to contribute to shareholder returns.
Convex Capital Limited ("Convex Capital")
Convex Capital, the specialist sell-side corporate finance boutique based in Manchester, was acquired by the Group in September 2019. Convex is entirely focussed on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates or Private Equity. Convex identifies and proactively targets firms that it believes represent attractive acquisition opportunities.
The acquisition of Convex was part of the Board's strategy to diversify the Group beyond legal services, focusing on other high-margin professional service areas. Convex is an entrepreneurial, high-margin and cash-generative business operating across the UK and Europe which will provide the Group further cash for reinvestment.
Convex Capital has completed over £1 billion of transaction value over the last four years and completed three deals since we acquired the business. Convex Capital has always had a strong pipeline of diversified deals. As a result of the pandemic, Convex Capital has experienced the deferral of nearly all the transactions planned for the first half of 2020 with some cancelled. To mitigate the impact of this, staff costs were reduced, and senior management swapped base salary for commission on future completed deals. In July 2020, Convex was the first of the Group's offices to reopen following the easing of the lockdown restrictions.
The strength of the pipeline and the agile nature of the business has enabled Convex Capital to accelerate deals that have not been impacted by Covid-19. Up until this year, Convex Capital had consistently completed 12 transactions a year at an average of £700,000 per deal.
As Convex Capital only recognises revenue on the completion of transactions, it has only added £0.3 million to the Group's revenue equating to one small transaction and an additional fee from a previous deal based on deferred performance. Due to the timing of deals and the fixed cost base of people, the lack of activity in the first half has also impacted EBITDA. Group EBITDA was reduced by £1.1 million and subsequently the Group's profit.
However, we believe this is a timing issue, with deal completions expected in the second half. While Convex Capital has a potentially strong pipeline, it is not known how many of these transactions will be completed.
M&A
We will continue to assess selective M&A to build and diversify the business in order to create long term shareholder value. Our acquisition focus will remain on high-margin, specialist businesses which can also create opportunities for cross-referrals but only at the right value, and with the right deal structure. The Group remains disciplined in its approach to M&A and will continue to review potential opportunities according to its selective criteria.
Dividend
The Company's balance sheet remains solid, and the Board is committed to a progressive dividend policy. As stated in its Admission Document, the Board normally expects to pay out a minimum of 60 per cent of retained earnings from the core business, in any financial year by way of dividend, subject to cash requirements.
Due to the uncertainty caused by Covid-19, and to maintain some financial flexibility, the Board decided to pay a reduced interim dividend relating to the six months to 31 December 2019 of 1 pence per share on 19 June 2020 to shareholders on the register as at 29 May 2020. The total dividend relating to the year ending 31 December 2019 was therefore 3 pence per share.
The Board has reviewed the current half year results and proposes to postpone the decision on the exact amount of the full year's dividend until the end of the financial year, at which point, the Board will have better visibility on the Group's full year 2020 performance and wider economic indicators.
Outlook
The Group is performing well in a very testing environment and remains well positioned as we progress through the second half. We have worked hard to grow our services, adapt to changing client needs and build out our new litigation finance business. Our strategy of diversification has enabled the Group to progress. However, we remain cautious about making future forecasts given the economic uncertainty. The Board remains optimistic about the Group's growth prospects in the medium-term and will consider the evolving economic environment as we evaluate opportunities to grow and strengthen the Group.
Nicola Foulston
Chief Executive Officer
16 September 2020
Chief Financial Officer's Review
Financial Review
During the first half of 2020, we have dealt with the unusual trading situation caused by Covid-19, and have continued to build on our strong track record of delivering a profitable business. We have increasing revenue from diverse sources and maintained EBITDA margins while investing in the growth of the business. The Group is well positioned to deliver its growth strategy through product diversification, high-quality recruitment, and carefully selected acquisitions.
Key Performance Indicators (KPIs)
· Revenue and realised gains: £12.0 million (2019: £10.2 million)
· EBITDA: £2.6 million, 22% of revenue (2019: £3.8 million, 38%)
· Profit before tax: £1.4 million ,12% of revenue (2019: £3.2 million, 31% of revenue)
· Total lock up: 114 days (Debtor days 49) (2019: 118 days, Debtor days 47).
· RBL revenue per fee earner: £497,000 (2019: £350,000)
· Utilisation / Realisation: 93% / 116% (2019: 77%/96%)
Revenue and realised gains
Reported Group revenue and realised gains for the period is £12.0 million compared to £10.2 million in 2019, representing a 17% increase.
Of this increase, 2.9% (or £0.29 million) was a result of the acquisitions made during the previous financial year with the balance relating to organic growth. This half year shows no realised gain from the sale of litigation assets which represented £2 million of the £10.2 million revenue and realised gains in the last half year. The organic professional services revenue growth is up 42% to £11.7 million from £8.2 million in 2019. This arose due to strong performance in Dispute Resolution and Corporate, that delivered £3.2m of the total revenue. The number of partners in our legal services business has remained broadly constant at 20 with 47 fee earners and an annualised revenue per fee earner of £497,000.
Staff costs
Total staff costs in 2020 were £7.5 million, which includes £1.1m for Convex and £0.1 million for LionFish. The average number of employees was 92 (2019:75) The acquisition of Convex has added 16 staff to Group's headcount, which at the end of the period total 88.
Overhead costs
During the half year to 30 June 2020, the Group incurred overheads of £9.3 million (before depreciation and amortisation) (2019: £6.4 million). Staff costs were £7.5 million (2019: £5.2 million), of which contractors costs were £1.4 million (2019 £0.8 million).
Other operating costs were £1.8 million (2019: £1.2 million), of which Convex represented £0.2 million. Other costs include Insurances £0.3 million, Rates £0.2 million, Training and recruitment £0.1 million, and Books & Subscriptions of £0.1 million.
EBITDA
EBITDA for the half year to 30 June 2020 was £2.6 million (22% of revenue) but does not include any revenue or EBITDA from LionFish or Convex which will be back end loaded. In 2019 EBITDA was £3.8 million and included £2 million EBITDA from the realisation of litigation asset sales.
Profit Before Tax
The profit before tax for the period was £1.4 million (2019: £3.2 million which included £2m contribution from the realised gain on the sale of the litigation assets).
Earnings Per Share (EPS)
The weighted average number of shares in 2020 was 85.6 million which gives a basic earnings per share (Basic EPS) for the period of 1.35p (2019: 3.19p).
Balance Sheet
2020
£m2019
£m
Goodwill, intangible and tangible assets
45.4
27.1
Current Assets
15.1
9.2
Current Liabilities
(6.4)
(3.7)
54.1
32.6
Net debt
(1.6)
8.7
Non-Current Liabilities
(5.8)
(6.0)
Deferred consideration
(4.0)
-
Net assets
42.7
35.3
The Group's net assets as at 30 June 2020 increased by £7.4 million on the prior year due to an increase in the trading for the period and the increase in goodwill and intangible assets resulting from the acquisition of Convex.
Goodwill, Tangible and Intangible Assets
Included within tangible assets is £6.3 million which relates to IFRS 16 right of use assets for the Group's leases. Within intangible assets and £35 million of other intangible assets identified, on current and prior year acquisitions, such as customer relationships and brand. The Board has considered the amounts at which goodwill and intangible assets are stated on the basis of forecasts future cash flows and , although these are subjected to unusually high levels of general uncertainty due to Covic-19, concluded that that these assets have not been materially impaired.
Working Capital
Management of lock up has continued to be a key focus of the Group over the period. Lock up days is a measure of the length of time it takes to convert work done into cash. It is calculated as the combined debtor and WIP days for the Group. This is a key focus for management and the Board as it drives the cash generation necessary to support the growth strategy of the Group. Lock up days at 30 June 2020 were 114 compared to 118 for the previous year.
Net Debt
We have a revolving credit facility of £10 million, which we have drawn down during the first six months of 2020 and our net debt position is £1.6 million at the end of the period. This positions the Group well to deliver its strategy into 2020 and support the business through the uncertainty of Covid-19.
Cash Conversion
2020
£m2019
£m
Net cash generated from operations
0.7
(0.1)
Interest
(0.2)
(0.1)
Capital expenditure
(0.1)
(0.4)
Free cash flow
0.4
(0.6)
Underlying profit after tax
1.2
2.6
Cash conversion
34%
(23)%
The cash conversion percentage measures the Group's conversion of its underlying profit after tax into free cash flows. Cash conversion of 34% for the year shows an increase from previous periods as a result of the six-month trading period and is a further focus of the business to drive to our targets of 75%.
Net Debt / Net Cash and cash equivalents
Net debt at the end of the period was £1.6 million (2019: £8.7 million net cash).The movement during the period included the drawn down of the RCF of £10.0 million an additional £0.67 million generated from operating activities, less £1.1 million paid out on tax , £1.6 million on litigation investments, £0.8 million in Dividends, £0.1 million in capex and £0.5 million in operating leases.
Summary
We are pleased with the profitability and performance of the Group during the first half. The business has responded to the challenges of Covid-19 and the delays in two areas of our business. However, it is important to acknowledge the impact of Covid-19 on business life, and it will be a significant challenge moving forward. There will be greater uncertainty until the full impact is more visible.
Robert Parker
Chief Financial Officer
16 September 2020
Unaudited consolidated statement of comprehensive income
For the period ended 30 June 2020
Note
1 January to
1 January to
30 June 2020
30 June 2019
£
£
Revenue
4
11,973,119
8,235,314
Realised fair value gains
4
-
2,000,000
Personnel costs
5
(7,538,307)
(5,167,352)
Depreciation and amortisation expense
(1,024,787)
(545,785)
Other expenses
(1,797,370)
(1,226,737)
_______
_______
Profit from operations
1,612,655
3,295,440
EBITDA
2,637,442
3,841,225
Finance expense
(184,458)
(113,886)
Finance income
18,081
15,312
_______
_______
Profit before tax
4
1,446,278
3,196,866
Tax expense
(288,457)
(642,394)
_______
_______
Profit and total comprehensive income attributable to the ordinary equity holders of the parent
1,157,821
2,554,472
_______
_______
Earnings per share attributable to the
ordinary equity holders of the parent
6
Profit
Basic (pence)
1.35
3.19
Diluted (pence)
1.35
3.19
_______
_______
Unaudited consolidated statement of financial position
As at 30 June 2020
Company registered number: 11189598
Note
30 June
30 June
2020
2019
Assets
£
£
Current assets
Trade and other receivables
15,145,049
9,239,787
Cash and cash equivalents
8,443,748
8,673,109
_______
_______
23,588,797
17,912,896
Non-current assets
Property, plant and equipment
8
579,826
557,850
Right-of-use assets
9
6,277,912
6,878,338
Intangible assets
10
34,757,968
17,966,471
Litigation investments
11
3,782,823
1,735,822
_______
_______
45,398,529
27,138,481
_______
_______
Total assets
68,987,326
45,051,377
_______
_______
Liabilities
Current liabilities
Trade and other payables
8,775,171
1,383,437
Loans and borrowings
12
10,000,000
-
Leases
9
833,450
887,683
Current tax liabilities
689,817
1,399,202
Provisions
95,375
56,904
_______
_______
20,393,813
3,727,226
Non-current liabilities
Leases
9
5,500,602
5,872,520
Deferred tax liability
348,440
140,781
_______
_______
5,849,042
6,013,301
_______
_______
Total liabilities
26,242,855
9,740,527
_______
_______
NET ASSETS
42,744,471
35,310,850
_______
_______
Issued capital and reserves attributable to
owners of the parent
Share capital
171,184
160,184
Share premium reserve
37,565,129
32,516,129
Retained earnings
5,008,158
2,634,537
_______
_______
TOTAL EQUITY
42,744,471
35,310,850
_______
_______
The interim statements were approved by the Board of Directors and authorised for issue on 15 September 2020.
Unaudited consolidated statement of cash flows
For the period ended 30 June 2020
Note
2020
2019
£
£
Cash flows from operating activities
Profit for the period before tax
1,446,278
3,196,866
Adjustments for:
Depreciation of property, plant and equipment
8
162,598
94,661
Amortisation of right-of-use assets
9
482,286
432,374
Amortisation of intangible fixed assets
10
379,903
18,750
Finance income
(18,081)
(15,312)
Finance expense
184,458
113,886
_______
_______
2,637,442
3,841,225
(Increase) in trade and other receivables
(4,056,237)
(3,285,227)
(Decrease)/increase in trade and other payables
2,064,235
(514,726)
Increase in provisions
20,375
21,640
_______
_______
Cash generated from operations
665,815
62,912
Tax paid
(1,067,832)
-
_______
_______
Net cash flows from operating activities
(402,017)
62,912
Investing activities
_______
_______
Purchases of property, plant and equipment
8
(104,042)
(347,379)
Interest received
18,081
15,312
Litigation investments
11
(1,572,937)
(1,735,822)
_______
_______
Net cash used in investing activities
(1,658,898)
(2,067,889)
_______
_______
Financing activities
Dividends paid to holders of the parent
7
(823,284)
(2,228,300)
Proceeds from loans and borrowings
12
11,000,000
-
Repayment of loans and borrowings
(1,000,000)
-
Repayments of lease liabilities
9
(397,751)
(330,199)
Interest paid on loans and borrowings
(76,678)
-
Interest paid on lease liabilities
9
(107,780)
(113,882)
_______
_______
Net cash from financing activities
8,594,507
(2,672,381)
_______
_______
Net (decrease)/increase in cash and cash equivalents
6,533,592
(4,677,358)
Cash and cash equivalents at beginning of period
1,910,156
13,350,467
_______
_______
Cash and cash equivalents at end of period
8,443,748
8,673,109
_______
_______
Unaudited consolidated statement of changes in equity
For the period ended 30 June 2020
Share
Capital
Share
Premium
Retained
Earnings
Total attributable to equity holders of parent
£
£
£
£
Balance at 1 January 2019
160,184
32,516,129
2,308,365
34,984,678
Comprehensive income for the period
Profit for the period
-
-
2,554,472
2,554,472
______
______
______
______
Total comprehensive income for the period
-
-
2,554,472
2,554,472
______
______
______
______
Contributions by and distributions to owners
Dividends
-
-
(2,228,300)
(2,228,300)
______
______
______
______
Total contributions by and distributions to owners
-
-
(2,228,300)
(2,228,300)
______
______
______
______
Balance at 30 June 2019 (unaudited)
160,184
32,516,129
2,634,537
35,310,850
______
______
______
______
At 1 July 2019
160,184
32,516,129
2,634,537
35,310,850
Comprehensive income for the period
Profit for the period
-
-
3,622,126
3,622,126
______
______
______
______
Total comprehensive income for the period
-
-
3,622,126
3,622,126
______
______
______
______
Contributions by and distributions to owners
Dividends
(1,583,042)
(1,583,042)
Issue of share capital
11,000
5,049,000
-
5,060,000
______
______
______
______
Total contributions by and distributions to owners
11,000
5,049,000
(1,583,042)
3,476,958
______
______
______
______
Balance at 31 December 2019 (audited)
171,184
37,565,129
4,673,621
42,409,934
______
______
______
______
Unaudited consolidated statement of changes in equity
For the period ended 30 June 2020 (continued)
Share
Capital
Share
Premium
Retained
Earnings
Total attributable to equity holders of parent
£
£
£
£
Balance at 1 January 2020
171,184
37,565,129
4,673,621
42,409,934
Comprehensive income for the period
Profit for the period
-
-
1,157,821
1,157,821
______
______
______
______
Total comprehensive Income for the period
-
-
1,157,821
1,157,821
______
______
______
______
Contributions by and distributions to owners
Dividends
-
-
(823,284)
(823,284)
______
______
______
______
Total contributions by and distributions to owners
-
-
(823,284)
(823,284)
______
______
______
______
Balance at 30 June 2020 (unaudited)
171,184
37,565,129
5,008,158
42,744,471
______
______
______
______
Unaudited notes to the financial statements for the period ended 30 June 2020
1
Basis of preparation
RBG Holdings plc is a public limited company, incorporated on 6 February 2018 and domiciled in the United Kingdom. Its registered office is 9-13 Andrew Street, London, EC4A 3AF. The principal activity of the Group is the provision of legal and professional services, including management and financing of litigation projects.
Status of Interim Report
The Interim Report covers the six months ended 30 June 2020, with comparative figures for the six months ended 30 June 2019, and was approved by the Board of Directors on 15th September 2020. The Interim Report is unaudited.
The interim condensed set of consolidated financial statements in the Interim Report are not statutory accounts as defined by Section 434 of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2019 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Section 498 of the Companies Act 2006.
The principal accounting policies adopted in the preparation of the unaudited consolidated financial statements are set out in Note 2. The policies have been consistently applied to the periods presented, unless otherwise stated.
The unaudited consolidated financial statements of the Group have been prepared in accordance with IFRS as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in Note 3.
Going concern
The Group financial statements are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements.
COVID-19
While the events surrounding the COVID-19 pandemic continued to evolve during the first six months of 2020, the Group's primary focus was, and continues to be, the health and safety of its employees. The spread of COVID-19 has caused the Group to modify its business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings), and the Group may take further actions if required by government authorities, or that it determines are in the best interest of the company's employees and clients. The ultimate magnitude of COVID-19, including the extent of its impact on the Group's operational results, will be determined by the length of time that such circumstances continue, measures taken to prevent its spread, and the demand for the Group's services, as well as the effect of governmental and public actions taken in response.
Whilst the Group has traded profitably, the COVID-19 pandemic has, not surprisingly, impacted on the Group's overall financial performance for the period ended 30 June 2020 and on its financial position as at 30 June 2020. Whilst billing and cash generation have remained strong for RBL, there have been no litigation finance sales during the period and Convex Capital has seen deals delayed and some cancelled. The loss of these two profitable revenue streams has impacted on the Group's profitability in the period, however the Group is expecting both litigation finance sales and M&A deals to be completed in the second half of the year.
In addition to its regular budgeting, the Group has prepared sensitised projections for the rest of 2020 and 2021, to assess the impact on business of possible adverse consequences of COVID-19, in particular, failure to complete corporate finance transactions and a fall in legal services work, resulting in reduction in operating cash flow. These projections support the expectation that the Group will be able to continue to trade within its cash resources, which include a £10m Revolving Credit Facility with HSBC, for the foreseeable future. They also demonstrate that the Group's assets are not impaired.
Notes (continued)
2
Significant accounting policies
Revenue
Revenue comprises the fair value of consideration receivable in respect of services provided during the period, inclusive of recoverable expenses incurred but excluding value added tax.
Legal and Other Professional services revenues
Where fees are contractually able to be rendered by reference to time charged at agreed rates, the revenue is recognised over time, based on time worked charged at agreed rates, to the extent that it is considered recoverable.
Where revenue is subject to contingent fee arrangements, including where services are provided under Damages Based Agreements (DBAs), the Group estimates the amount of variable consideration to which it will be entitled and constrains the revenue recognised to the amount for which it is considered highly probable that there will be no significant reversal. Due to the nature of the work being performed, this typically means that contingent revenues are not recognised until such time as the outcome of the matter being worked on is certain.
Bills raised are payable on delivery and until paid form part of Trade receivables. The Group has taken advantage of the practical exemption in IFRS 15 not to account for significant financing components where the Group expects the time difference between receiving consideration and the provision of the service to a client will be one year or less. Where revenue has not been billed at the balance sheet date, it is included as contract assets and forms part of Trade and other receivables.
Financial assets
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:
Fair value through profit or loss
Litigation investments relate to the provision of funding to litigation matters in return for a participation share in the settlement of that case (Damages Based Award). Investments are initially measured at the sum invested and are subsequently held at fair value through the profit and loss.
Where the Group sells an interest in its entitlement to any award under a Damages Based Award to a third party, this gives rise to a realised fair value gain through the profit and loss when the sale is agreed. These sales are non-recourse and, if the case is successful, the relevant % of the settlement received is paid to the third party.
Notes (continued)
2
Significant accounting policies (Continued)
Amortised cost
These assets arise principally from the provision of goods and services to customers (eg trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within cost of sales in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the consolidated statement of comprehensive income (operating profit).
Impairment provisions for receivables from related parties and loans to related parties, including those from subsidiary companies, are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. This annual assessment considers forward-looking information on the general economic and specific market conditions together with a review of the operating performance and cash flow generation of the entity relative to that at initial recognition. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short term highly liquid investments with original maturities of three months or less.
Financial liabilities
The Group classifies its financial liabilities depending on the purpose for which the liability was acquired.
Other financial liabilities
All the Group's financial liabilities are classified as other financial liabilities, which include the following items:
- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
Notes (continued)
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.
3
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on actual experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.
Estimates and assumptions
- Estimated impairment of intangible assets including goodwill
Determining whether an intangible asset is impaired requires an estimation of the value in use of the cash generating units to which the intangible has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and determine a suitable discount rate. A difference in the estimated future cash flows or the use of a different discount rate may result in a different estimated impairment of intangible assets.
- Impairment of trade receivables
Receivables are held at cost less provisions for impairment. Impairment provisions are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. A different assessment of the impairment provision with reference to the probability of the non-payment of trade debtors or the expected loss arising from default, may result in different values being determined.
- Other receivables
Judgement has been exercised in respect of interests sold in Damages Based Agreements and where the amount remains outstanding.
- Revenue recognition
Where the group performs work that is chargeable based on hours worked at agreed rates, assessment must be made of the recoverability of the unbilled time at the period end. This is on a matter by matter basis, with reference to historic and post year-end recoveries. Different views on recoverability would give rise to a different value being determined for revenue and a different carrying value for unbilled revenue.
Where revenue is subject to contingent fee arrangements, the Group estimates the amount of variable consideration to which it will be entitled and constrains the revenue recognised to the amount for which it is considered highly probable that there will be no significant reversal. Due to the nature of the work being performed, this typically means that contingent revenues are not recognised until such time as the outcome of the matter being worked on is certain. Factors the Group considers when determining whether revenue should be constrained are whether: -
i) The amount of consideration receivable is highly susceptible to factors outside the Group's influence.
ii) The uncertainty is not expected to be resolved for a long time.
iii) The Group has limited previous experience (or limited other evidence) with similar contracts.
iv) The range of possible consideration amounts is broad with a large number of possible outcomes.
Notes (continued)
3
Critical accounting estimates and judgements (continued)
Different views being determined for the amount of revenue to be constrained in relation to each contingent fee arrangement may result in a different value being determined for revenue and also a different carrying value being determined for unbilled amounts for client work.
Where the group enters into Damages Based Agreements that include both the provision of services and the provision of litigation finance, the Group must apportion the total expected settlement between that arising as conditional revenue for services and that arising as a return on participation. This requires estimation of the total amount of time cost and disbursements that will be incurred on a matter and the expected settlement value; the allocation of the DBA to revenue is made with reference to standard returns on contingent fee work. Different views will impact the level of unrecognised contingent revenue and also the recognised financial asset relating to the DBA participation.
Where non-contingent fees as well as contingent revenue are earned on DBAs, the group must make a judgement as to whether non-contingent amounts represent revenue or a reduction in funding, with reference to the terms of the agreement and timing and substance of time worked and payments made. Where non-contingent revenue arises, the Group must match it against the services to which it relates. This requires Management to estimate work done as a proportion of total expected work to which the fee relates. Different views could impact the level of non-contingent revenue recognised.
- Claims and regulatory matters
The Group from time to time receives claims in respect of professional service matters. The Group defends such claims where appropriate but makes provision for the possible amounts considered likely to be payable, having regard to any relevant insurance cover held by the Group. A different assessment of the likely outcome of each case or of the possible cost involved may result in a different provision or cost.
- Accounting for business combinations and fair value
Business combinations are accounted for at fair value. Valuation of acquired intangibles requires estimates of future growth rates, profitability, remaining useful lives and discount rates for input to the business combination valuation methodology. A difference in the estimated future growth rates, profitability, the use of a different discount rate, or the selection of a different valuation method may result in a different assessment of fair value of the asset or liability acquired as part of the business combination.
- Litigation investments and fair value
Where the group enters into Damages Based Agreements that include both the provision of services and provision of litigation finance, the Group must apportion the total expected settlement between that arising as conditional revenue for services and that arising as a return on participation. The judgements arising in this regard are explained under revenue above. Litigation investments are held at fair value based on a semi-annual review of each investment's fair value. Fair values are determined on the specifics of each investment and will typically change upon an investment having a return entitlement or progressing in a manner that, in the Group's judgement, would result in a third party being prepared to pay an amount different from the original sum invested for the Group's rights in connection with the investment.
The fair value estimation process is inherently subjective. Awards and settlements are hard to predict and often have a wide range of possible outcomes. Furthermore, there is much unpredictability in the actions of courts, litigants and defendants and because of the large number of variables involved there is a consequent difficulty of predictive analysis. In addition, there is little activity in transacting investments and hence little relevant data for benchmarking the effect of investment progression on fair value, although the existence of secondary market transactions is a valuation input. In the Group's opinion there are no inputs or variables to which the values of the investments are correlated and whilst the Group's fair value estimation is its best assessment of the current fair value of each investment, the use of different possible outcomes and relative probabilities may result in a different Group income and investment valuation. Where the Group has sold interests in its DBA participation rights to third parties, the selling price is used as a benchmark for the fair value of the remaining asset, reducing it for expected future costs to be incurred. Where the Group sells an interest in a DBA, the proceeds are recognised as realised fair value gain.
Notes (continued)
4
Segment information
The chief operating decision makers are the Board of Directors of RBG Holdings plc. The Board considers the following three strategic business groups to be its reportable segments. These business groups offer different services and are reported separately because of the different specialisms in these business groups.
The following summary describes the operations of each reportable segment:
- Legal services - Provision of legal advice
- Litigation finance - Financing of litigation projects and the sale of litigation investment assets
- Other Professional services -Provision of sell-side M&A corporate finance services
2020
Legal services
Litigation finance
Other Professional services
Total
£
£
£
£
Segment revenue
11,680,284
-
292,835
11,973,119
_______
_______
_______
_______
Segment realised fair value gains
--
-
-
-
_______
_______
_______
_______
Segment contribution
6,533,036
(65,374)
(781,725)
5,685,937
_______
_______
_______
Segment realised fair value gains
--
-
-
-
_______
_______
_______
Costs not allocated to segments
Personnel costs
(1,277,058)
Depreciation and amortisation
(1,024,787)
Other operating expense
(1,771,437)
Net financial expenses
(166,377)
_______
Group profit for the period before tax
1,446,278
_______
Notes (continued)
4
Segment information (continued)
2019
Legal services
Litigation finance
Other Professional services
Total
£
£
£
£
Segment revenue
8,235,314
-
-
8,235,314
_______
_______
_______
_______
Segment realised fair value gains
-
2,000,000
-
2,000,000
_______
_______
_______
_______
Segment contribution
4,360,735
-
-
4,360,735
_______
_______
_______
Segment realised fair value gains
-
1,994,058
-
1,994,058
_______
_______
_______
Costs not allocated to segments
Personnel costs
(1,298,806)
Depreciation and amortisation
(545,785)
Other operating expense
(1,214,762)
Net financial expenses
(98,574)
_______
Group profit for the period before tax
3,196,866
_______
5
Employees
2020
2019
Group
£
£
Staff costs (including directors) consist of:
Wages and salaries
5,292,969
3,748,821
Short-term non-monetary benefits
56,624
46,218
Social security costs
644,035
439,431
Cost of defined contribution scheme
134,522
134,449
_______
_______
6,128,150
4,368,919
_______
_______
Personnel Costs stated in the Consolidated statement of comprehensive income includes the costs of contractors of £1,410,157 (2019: £798,433).
Within RBG Holdings plc, RBL and Convex Capital applied for a government support program introduced in response to the global pandemic. Included in profit or loss is £27,054 of government grants obtained relating to supporting the payroll of the Group's employees. The Group has elected to present this government grant by reducing the related expense. The Group does not have any unfulfilled obligations relating to this program.
Notes (continued)
5
Employees (continued)
The average number of employees (including directors) during the period was as follows:
2020
2019
Number
Number
Legal and professional staff
57
44
Administrative staff
35
31
_______
_______
92
75
_______
_______
Defined contribution pension schemes are operated on behalf of the employees of the group. The assets of the schemes are held separately from those of the group in independently administered funds. The pension charge represents contributions payable by the group to the funds and amounted to £134,522 (2019: £134,449). Contributions amounting to £77,274 (2019: £66,907) were payable to the funds at period end and are included in Trade and other payables.
6
Earnings per share
Total
Total
2020
2019
Numerator
£
£
Profit for the period and earnings used in basic and diluted EPS
1,157,821
2,554,472
_______
_______
Denominator
Number
Number
Weighted average number of shares used in basic EPS
85,592,106
80,092,106
Effect of:
Contingent share consideration on business combination
-
-
_______
_______
Weighted average number of shares used in diluted EPS
85,592,106
80,092,106
_______
_______
Earnings per share is calculated as follows:
2020
2019
Pence
Pence
Basic earnings per ordinary share
1.35
3.19
Diluted earnings per ordinary share
1.35
3.19
Clawback arrangements over certain shares of Cascades Ltd would have an anti-dilutive effect on earnings per share and therefore no impact on diluted earnings per share.
Notes (continued)
7
Dividends
On 19 June 2020, RBG Holdings plc paid a dividend of £823,284 in respect of 2019 (1.0p per share).
8
Property, plant and equipment
Group
Plant and
Fixtures
Computer
Machinery
and fittings
Equipment
Total
£
£
£
£
Cost
At 1 January 2020
324,512
116,258
501,408
942,178
Additions
5,083
29,001
69,958
104,042
Disposals
(1,339)
(1,339)
_______
_______
_______
_______
At 30 June 2020
329,595
145,259
570,027
1,044,881
_______
_______
_______
_______
Accumulated Depreciation and Impairment
At 1 January 2020
172,297
9,097
122,402
303,796
Charge for the period
54,520
17,439
90,639
162,598
Disposals
(1,339)
(1,339)
_______
_______
_______
_______
At 30 June 2020
226,817
26,536
211,702
465,055
_______
_______
_______
_______
Net book value
At 1 January 2020
152,215
107,161
379,006
638,382
At 30 June 2020
102,778
118,723
358,325
579,826
_______
_______
_______
_______
Under a debenture signed and registered on 25 October 2019, HSBC UK Bank plc have a fixed charge over the tangible assets of the Group.
Notes (continued)
9
Leases
The Group leases its business premises in the United Kingdom. The lease contracts either provide for annual increases in the periodic rent payments linked to inflation or for payments to be reset periodically to market rental rates. The Group also leases an item of office equipment, with fixed payments over the lease term.
Land and buildings
Computer equipment
Total
£
£
£
At 1 January 2020
6,750,287
9,911
6,760,198
Acquired through business combinations
Amortisation
(478,982)
(3,304)
(482,286)
Variable lease payment adjustment
_______
_______
_______
At 30 June 2020
6,271,305
6,607
6,277,912
_______
_______
_______
Lease liabilities
Land and buildings
Computer equipment
Total
£
£
£
At 1 January 2020
6,721,732
10,071
6,731,803
Acquired through business combinations
Interest expense
107,632
148
107,780
Variable lease payment adjustment
Lease payments
(502,078)
(3,453)
(505,531)
_______
_______
_______
At 30 June 2020
6,327,286
6,766
6,334,052
_______
_______
_______
At 30 June 2020, lease liabilities were falling due as follows:
Group
Up to 3 months
Between 3 and 12 months
Between 1 and 2 years
Between 2 and 5 years
Over 5 years
Total
£
£
£
£
£
£
Lease liabilities
205,840
627,610
872,625
2,636,714
1,991,263
6,334,052
Notes (continued)
10
Intangible assets
Group
Goodwill
Customer
Brand
Total
Contracts
£
£
£
£
Cost
At 1 January 2020
33,035,260
1,367,784
1,411,596
35,814,640
Acquired through business combinations
-
-
-
-
_______
_______
_______
_______
At 30 June 2020
33,035,260
1,367,784
1,411,596
35,814,640
_______
_______
_______
_______
Accumulated amortisation and impairment
At 1 January 2020
-
604,713
72,056
676,769
Amortisation charge
-
344,613
35,290
379,903
Impairment losses
-
-
-
-
_______
_______
_______
_______
At 30 June 2020
-
949,326
107,346
1,056,672
_______
_______
_______
_______
Net book value
At 1 January 2020
33,035,260
763,071
1,339,540
35,137,871
At 30 June 2020
33,035,260
418,458
1,304,250
34,757,968
_______
_______
_______
_______
Under a debenture signed and registered on 25 October 2019, HSBC UK Bank plc have a fixed charge over the intangible assets of the Group.
11
Litigation investments
The table below provides analysis of the movements in the Level 3 financial assets.
2020
2019
£
At 1 January
2,209,886
-
Additions
1,572,937
1,735,822
Realisations
-
-
Fair value movement
-
-
_______
_______
At 30 June
3,782,823
1,735,822
_______
_______
Sensitivity of Level 3 valuations
Following investment, the Group engages in a semi-annual review of each investment's fair value. At 30 June 2020, should the value of investments have been 10% higher or lower than provided for in the Group's fair value estimation, while all other variables remained constant, the Group's income and net assets would have increased and decreased respectively by £378,282 (2019: £173,582).
Notes (continued)
12
Loans and borrowings
The book value and fair value of loans and borrowings which all denominated in sterling are as follows:
Book value
Fair value
Book value
Fair value
30 Jun 20
30 Jun 20
30 Jun 19
30 Jun 19
£
£
£
£
Bank loans
-
- Secured
10,000,000
10,000,000
-
-
_______
_______
_______
_______
At 30 June
10,000,000
10,000,000
-
-
_______
_______
_______
_______
The rate at which Sterling denominated loans and borrowings are payable is 1.75% above LIBOR.
The bank loans are secured by fixed and floating charges over the assets of the Group. The Group has no undrawn committed borrowing facilities available at 30 Jun 20 (2019: £Nil).
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Recent news on RBG Holdings
See all newsREG - RBG Holdings PLC - Holding(s) in Company
AnnouncementREG - RBG Holdings PLC - Holding(s) in Company
AnnouncementREG - RBG Holdings PLC - Notice of Results & Investor Presentation
AnnouncementREG - RBG Holdings PLC - Disposal of Convex Capital & Directorate Change
AnnouncementREG - RBG Holdings PLC - Director/PDMR Dealings
Announcement