REG - RBG Holdings PLC - Board Changes & Pre-Close Trading Update

RBG HoldingsAnnouncement

31/01/2023 07:00

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RNS Number : 3281O  RBG Holdings PLC  31 January 2023

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as retained as part of UK law by virtue of the European
Union (Withdrawal) Act 2018 (as amended). Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

31 January 2023

RBG Holdings plc

 

("RBG" or "the Group")

Board Changes & Pre-Close Trading Update

 

RBG Holdings plc (AIM: RBGP), the legal and professional services group, today
announces proposed changes to its Board of Directors as well as a pre-close
trading update for the year ended 31 December 2022.

 

Board Changes

 

The Board has lost confidence in its Chief Executive, Nicola Foulston, as a
result of cultural concerns and the execution of the Group's strategy; her
employment contract has been terminated with immediate effect.

 

The Board of Directors is being restructured and it is intended, subject to
the satisfactory completion of necessary due diligence, to make the following
appointments to reflect the scale, profitability, and importance of RBG's core
legal services businesses:

 

·    Tania MacLeod - Executive Director

·    Nick Davis - Executive Director

Furthermore, Jon Divers, current Group COO, will be appointed acting CEO with
immediate effect and will join the Board, subject to the satisfactory
completion of necessary due diligence.  Suzanne Drakeford-Lewis will continue
as the Group's Finance Director.

The Non-Executive Board remains unchanged.

Further details about the new Board appointees will be issued in a separate
announcement upon completion of regulatory due diligence.

 

Trading Update and Dividend

 

Unaudited FY22 revenue, adjusted EBITDA and adjusted operating profit are
expected to be in line with consensus market expectations((1)). The Group's
balance sheet remains strong and the Group continues to trade within its
facility agreements.

 

As announced in December, the Group intends to pay a second interim dividend
for the twelve months to 31 December 2022 which will be announced with the
Group's FY22 results.

 

Legal & Professional Services Businesses

 

Overall, the Group continues to benefit from its diversified portfolio of
legal and professional services businesses, reducing overall volatility of
earnings.

 

RBG Legal Services, which comprises Rosenblatt and Memery Crystal, had a good
year building on a solid 2021 financial year.  In the second half of the
year, strong demand was seen for its Contentious legal offer which offset
slower demand for its Corporate offer as a result of the continued economic
uncertainty; this resulted in fewer transactions, including M&A.

 

Its specialist sell-side corporate finance boutique, Convex Capital Limited
('Convex'), had a good year, despite the challenging economic conditions;
Convex's pipeline of deals has been slower to convert in the second half of
2022, with a number of transactions now expected to complete in the first half
of 2023.

 

The range and breadth of legal and professional services provided by Memery
Crystal, Rosenblatt and Convex means that despite the difficult economic
conditions, trading has been robust.

 

LionFish Litigation Finance Limited ("LionFish")

 

As previously announced, RBG has taken the strategic decision to focus on its
legal and professional services businesses, and is taking steps to reduce the
Group's ongoing exposure to third party litigation funding commitments through
its subsidiary LionFish.

 

The Board has therefore been in discussions with a number of interested
parties with regard to LionFish. A number of potential offers have been
evaluated and whilst there can be no certainty of outcome, the Board is much
encouraged by the level of interest.  Further updates will be provided at the
appropriate time.

 

Commenting, Marianne Ismail, Non-Executive Director, said:

"As previously announced, our decision to refocus on our core legal and
professional services businesses will ensure we can build on our strong
position in this sector. We are working to reduce our exposure to the ongoing
funding commitments of LionFish in a way that benefits shareholders and this
will free up capital and management resource to focus on the significant
opportunities we see to grow our core businesses. We are looking forward to
the next 12 months with renewed optimism."

- ends -

((1)) RBG understands that consensus market expectations for the year ended 31
December 2022 are for revenues of £49.5 million, Adj. EBITDA of £11.2
million and Adj. PBT of £6.9 million (Source: FactSet)

 

Enquiries:

 RBG Holdings plc                                                 Via SEC Newgate
 Marianne Ismail, Non-Executive Director

 Singer Capital Markets (Nomad and Broker)                       Tel: +44 (0)20 7496 3000
 Rick Thompson / Alex Bond / James Fischer (Corporate Finance)

Tom Salvesen (Corporate Broking)

 SEC Newgate (for media enquiries)                               Tel: +44 (0)7540 106366
 Tali Robinson, Robin Tozer                                      rbg@secnewgate.co.uk (mailto:rbg@secnewgate.co.uk)

 

About RBG Holdings plc

·    Further information is available at RBG Holdings plc's website
(https://www.rbgholdings.co.uk/)

·    Follow RBG Holdings on LinkedIn
(https://www.linkedin.com/company/rbg-holdings-plc/)

 

RBG Holdings plc is a professional services group, which comprises the
following divisions:

 

RBG Legal Services Limited ("RBGLS")

RBGLS is the Group's legal services division which combines the businesses
previously operated by Rosenblatt Limited and Memery Crystal LLP.

 

Rosenblatt

·    Rosenblatt is one of the UK's pioneering legal practices and a leader
in dispute resolution. Rosenblatt provides a range of legal services to its
diversified client base, which includes companies, banks, entrepreneurs, and
individuals. Complementing this is Rosenblatt's increasingly international
footprint, advising on complex cross-jurisdictional disputes.

 

Memery Crystal

·    Memery Crystal offers legal services in a range of areas such as
corporate (including a market-leading corporate finance offering), real
estate, commercial, IP & technology (CIPT), banking & finance, tax
& wealth structuring, and employment. Memery Crystal is one of the leading
legal practices in the UK to advise the emerging cannabis sector on a wide
range of business issues. Memery Crystal offers a partner-led service to a
broad range of clients, from multinational companies, financial institutions,
and owner-managed businesses to individual entrepreneurs.

 

Convex Capital Limited ("Convex Capital")

·    Convex Capital is a specialist sell-side corporate finance boutique
based in Manchester. Convex Capital is entirely focused on helping companies,
particularly owner-managed and entrepreneurial businesses, realise their value
through sales to large corporates. Convex Capital identifies and proactively
targets firms that it believes represent attractive acquisition opportunities.

 

LionFish Litigation Finance Limited ("LionFish")

·    The Group also provides litigation finance in selected cases through
a separate arm, LionFish Litigation Finance Limited. 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 has two types of
litigation assets - Rosenblatt's own client matters, and litigation matters
run by third-party solicitors. LionFish is positioned to be a unique,
alternative provider to the traditional litigation funders.

 

 

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