Full Year Trading Update

RNS Number : 6051Y

FRP Advisory Group PLC

14 May 2021

 

FRP Advisory Group plc

("FRP" or the "Group")

Full Year Trading Update

Strong performance, with continued growth and strategic delivery

FRP Advisory Group plc, a leading UK professional services firm specialising in advisory services, today announces a trading update for the full year ended 30 April 2021.

Trading performance

In its first, full financial year as a plc, the Group delivered a strong performance, continuing to grow revenues, profits and the team.  Organic growth was driven by some large high-profile appointments early in the financial year and further gains in market share which were supported by demand-led hiring. In line with the Group's stated strategy, four complementary acquisitions were completed within the year, also contributing towards our growth.

As a result, the Group expects to report revenues for the full year to 30 April 2021 of £79 million, up 25% on the prior year (FY 2020: £63.2 million), and underlying adjusted EBITDA* of £23 million, up 22% on the prior year (FY 2020: £18.8 million). These results exceed the guidance provided in the 12 February 2021 trading update.

The FRP Corporate Finance team had a very busy year in a challenging, but ultimately active, UK M&A market.  Notable transactions include advising The Goat Agency on its minority investment from Inflexion, Encore Group on its MBO backed by Queen's Park Equity, Vehicle Replacement Group on its sale to Davies, Everest Dairies on its sale to Vibrant Foods and Prezzo on its sale to Cain International. The previously announced highly complementary acquisitions of Spectrum Corporate Finance Limited (who also have a Debt Advisory team) and JDC in East Anglia (who also have a Forensics team) during the year have given FRP a key position in the UK mid-cap transactional advisory market. 

The FRP Restructuring team continue to serve the full range of clients, including Personal clients, SME's, the core mid-market and high-profile appointments. The Restructuring team grew market share in an overall subdued market, due to the various support measures made available by the UK Government in response to the Covid-19 pandemic.  As a result of the support measures, the number of formal Company insolvency appointments over the past 12 months was 26% down, compared to the prior period.

* Our underlying adjusted EBITDA compares the current model of partner compensation on a like-for-like basis to the prior corresponding period, as the business was previously a full distribution partnership. It also excludes exceptional costs and a share based payment expense that arises from a) the Employee Incentive Plan (EIP) funded on IPO and b) Deemed remuneration amortisation linked to acquisitions.

Balance sheet

The Group's balance sheet remains strong with an unaudited net cash balance as at 30 April 2021 of £16.4 million (Cash of £24.4 million less recent structured debt of £8 million). The group also has an undrawn revolving credit facility (RCF) available of £10 million with Barclays Bank.

FRP acquired Spectrum Corporate Finance Ltd on 26 February 2021 which required a temporary draw on the RCF. Post completion, on 25 March 2021, FRP entered into a structured acquisition finance term loan facility with Barclays Bank. £8 million was drawn down from this facility, the temporary RCF draw was repaid and this term loan will be repaid over five years in 20 quarterly instalments.

The Group did not apply for any Covid-19 support, for example government backed lending schemes or delayed tax settlements.  During the Covid-19 pandemic period FRP have been dedicating significant effort and resources to help businesses navigate the crisis. In addition to our appointments, we have offered pro bono advice and shared extensive business support resources through our website.

Given the trading performance and strong balance sheet, the Group intends to propose a final dividend, in line with its stated dividend policy.

People and operations

The Board remains focused on the health, safety and wellbeing of all colleagues. Throughout the Covid-19 pandemic period, we have operated without interruption and none of our people were placed on furlough. Colleagues adapted well to remote working during lockdown periods and previous investments in our IT infrastructure have proven to be invaluable.  Ongoing investments within our IT infrastructure, Information Security and Risk management are expected.

The overall FRP team grew 30% year on year to 457 colleagues excluding consultants (30 April 2020: 351) through both acquisitions and demand-led hires. At 30 April 2021 we had 73 partners (2020: 51), 288 other fee earners (2020: 230) and 96 support staff (2020: 70).

FRP's offices across 22 locations in the UK continue to work well together, drawing on specialists from different service lines as necessary, in order to give each assignment the right team in order to deliver the best possible service and outcome.  The Group has recently hired a team of six in Scotland, including Partners Michelle Elliot and Stuart Robb to establish a new FRP office in Glasgow. In April 2021, Marco Piacquadio was hired as a Partner, who will be based in a new FRP office in Milton Keynes.

Notice of results

The Group expects to report its audited results for the full year on 27 July 2021 .

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

"We are pleased with the progress that has been made during our first year as a plc. I am particularly pleased with how our colleagues have navigated the uncertainties during the pandemic and adapted to serve clients without interruption.

We have continued to execute our growth strategy, with strong contributions from all five business divisions. After acquiring and then integrating two boutiques we have significantly bolstered our Corporate Finance offering. FRP now has a key position in the UK mid-cap transactional advisory market and is able to support a broader range of clients through a strengthened referral network.  

There is continued uncertainty around the shape and scale of the nationwide recovery following the economic impacts of the Covid-19 pandemic.  FRP's resilient business model is well positioned to help clients throughout their lifecycle, in addressing both their strategic ambitions, as pent-up liquidity is deployed and being available to help as challenges arise.

The medium-term outlook for our market remains positive and we have sufficient resource flexibility to service an increase in demand. The board remains confident of making further progress in the upcoming financial year."

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

Enquiries:

FRP Advisory Group plc   

Geoff Rowley, CEO

Jeremy French, COO

Gavin Jones, CFO

Enquiries via MHP

Cenkos Securities plc (Nominated Adviser and Sole Broker)

Max Hartley/Max Gould (Corporate Finance)

Alex Pollen (Sales)

Tel: [phone]

MHP Communications (Financial Public Relations)

Oliver Hughes

Charlie Barker

Pete Lambie

Tel: [phone]

[e-mail]  

Notes to Editors

FRP is a professional services firm established in 2010 which offers a range of advisory services to companies, lenders, investors and other stakeholders, as well as individuals. These services include:

· Corporate finance: mergers & acquisitions (M&A), strategic advisory and valuations, financial due diligence, capital raising, special situations M&A and partial exits.

· Restructuring advisory: corporate financial advisory, formal insolvency appointments, informal restructuring advisory, personal insolvency and general advice to all stakeholders.

· 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.

· Pensions advisory: pension scheme transaction advisory, pension scheme restructuring advisory, covenant advisory and corporate governance

 

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