REG - RBG Holdings PLC - Pre-Close Trading & Dividend Update

RBG HoldingsAnnouncement

27/01/2022 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:20220127:nRSa7624Za&default-theme=true

RNS Number : 7624Z  RBG Holdings PLC  27 January 2022

27 January 2022

 

RBG Holdings plc

("RBG" or the "Group")

 

Pre-Close Trading & Dividend Update

 

RBG Holdings plc (AIM: RBGP), the professional services group, today publishes
a pre-close trading update ahead of the publication of its financial results
for the twelve months ending 31 December 2021 on 29 March 2022.

 

The Board is pleased to announce that having completed a strong final quarter,
it now expects adjusted EBITDA for 2021 to be approximately 10% ahead of
current market expectations. As a result of this, and the Board's continued
confidence in the Group's growth prospects, the Board intends to pay a second
interim dividend of 3 pence per share in respect of the six months to 31
December 2021 on 25 February 2022 to shareholders on the register as of 4
February 2022. This brings the total dividend paid to shareholders in respect
of the 2021 financial year to 5 pence per share (2020: 3 pence per share).

 

The Group's balance sheet remains satisfactory with net debt at £14.2 million
(2020:net cash of £3.5 million).  This change reflects the acquisition of
Memery Crystal in May 2021. The Group has paid back £1 million of the £10
million term loan used to fund the acquisition. The term loan will be paid
down over five years. Furthermore, the Group has used £5.2 million of the
£15 million revolving credit facility announced in April 2021, so significant
headroom remains to support the Group's growth.

 

RBG Legal Services Limited

Following the completion of the acquisition of Memery Crystal in May 2021, the
Group combined its two law firms, Rosenblatt and Memery Crystal, into a new
legal services corporate entity called RBG Legal Services Limited ("RBGLS").

 

RBGLS has two client-facing brands of 'Rosenblatt', for contentious legal
services, and 'Memery Crystal', for non-contentious legal services. Overall,
RBGLS has performed well, benefitting from the increase in corporate and
commercial transactions and greater breadth and depth of expertise to service
the Group's growing client base.

 

The integration of the two firms' support functions is largely complete, with
the businesses set to move to a new practice management software system in
2022. As set out at the time of the acquisition, the two firms are proving to
be highly complementary and are sharing skills and resources, enhancing the
Group's offering to its combined client base. Furthermore, the successful
process of integrating Rosenblatt and Memery Crystal has led to a sustained
improvement in net margins of 29%, expected to rise towards 35% over the
medium-term as the benefits of the integration come through.

 

Litigation Finance

The Group has two types of litigation assets - RBGLS's own client matters, and
litigation matters run by third-party solicitors funded by LionFish Litigation
Finance Limited ("LionFish").

 

Both types of litigation investments not only have significant return
potential but represent an opportunity to extract additional value from the
Group's legal and commercial expertise and diversify its sources of income. In
2022, the Group expects to report returns on LionFish's litigation investments
in place of the de-risking of investments that has taken place to date.

 

In 2021 LionFish completed a further four investments bringing the total
investments made by LionFish since its inception in May 2020 to 10, with a
total capital commitment of £10.5 million of which £3.6 million has been
deployed (as at 31 December 2021). Disposals since inception total £6.4
million.

 

Convex Capital Limited ("Convex Capital")

The Group's specialist sell-side corporate finance boutique, Convex Capital,
successfully rebuilt its transaction pipeline in 2021. As a result, in the
2021 financial year, Convex Capital completed 14 deals generating revenue of
£9.4 million (2020: 2 deals, revenue of £1.6 million). Furthermore, as at 21
January 2022, Convex Capital has a strong pipeline of 22 deals with several
currently at various stages of completion.

 

Commenting Group CEO Nicola Foulston, said: "The Group has continued its
strong performance from the first six months, and has followed an excellent
2020, with an even better 2021 result.  Demand for legal services remains
strong, led by corporate and commercial transactions, such as IPOs and real
estate deals.  The integration of Memery Crystal has been successful with
only the roll-out of new practice management software to be completed. Both
Rosenblatt and Memery Crystal are working well together. Our client offering
and margin profile are moving in the right direction.

 

"We continue to build a portfolio of litigation investments comprising both
RBG's own client litigation investments and third-party client litigation
managed by other law firms through LionFish which offer the potential for high
returns for our shareholders.

 

"Finally, our M&A business, Convex Capital, has sustained its strong start
to the year converting its pipeline.  Given the progress of the Group, and
the structural growth drivers we are exposed to, we enter 2022 with
confidence."

 

Enquiries:

 RBG Holdings plc                                Via SEC Newgate

 Nicola Foulston, CEO

 Singer Capital Markets (Nomad and Broker)      Tel: +44 (0)20 7496 3000

 Shaun Dobson / Alex Bond (Corporate Finance)

 Tom Salvesen (Corporate Broking)

 SEC Newgate (for media enquiries)              Tel: +44 (0)7540 106366 rbg@secnewgate.co.uk

 Robin Tozer/Isabelle Smurfit

 

About 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.

 

LionFish Litigation Finance Limited

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 Company 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.

 

Convex Capital Limited

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.

 

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  TSTUNUBRUUUAUAR