TIDMFRP
RNS Number : 4065W
FRP Advisory Group PLC
12 December 2023
12 December 2023
FRP ADVISORY GROUP PLC
("FRP", the "Group" or the "Company")
Half Year Results
For the six months ended 31 October 2023
FRP Advisory Group plc, a leading national specialist business
advisory firm, announces its half year results for the six months
ended 31 October 2023 ("H1 2024").
FRP seeks to deliver solutions that create, preserve and recover
value, enabling businesses to navigate a broad range of complex
situations. Specialising in Restructuring, Corporate Finance, Debt,
Forensics and Financial Advisory, we develop effective strategies
tailored to the needs of businesses of all kinds. Our five service
pillars complement each other to support clients throughout their
entire business lifecycle. We draw on experts within each of our
service areas to put the best team forward for each situation.
Financial H1 2024 H1 2023 Growth
Revenue GBP58.7m GBP49.4m 19%
--------- --------- -------
Underlying adjusted EBITDA(1) GBP15.5m GBP11.6m 34%
--------- --------- -------
Reported profit before tax GBP11.5m GBP5.6m 105%
--------- --------- -------
Adjusted profit before tax(3) GBP13.8m GBP10.2m 35%
--------- --------- -------
Reported basic EPS 3.76p 2.68p 41%
--------- --------- -------
Adjusted total EPS(4) 4.20p 3.35p 25%
--------- --------- -------
Cash collection (inclusive of
VAT where applicable) GBP56.3m GBP52.0m 8%
--------- --------- -------
H1 dividend 1.8p 1.7p 6%
--------- --------- -------
Net cash(2) GBP11.7m GBP21.0m (56%)
--------- --------- -------
Revenue per Partner for 6 months GBP0.7m GBP0.6m 17%
--------- --------- -------
Non-Financial
--------- --------- -------
Number of administration appointments 169 78 117%
--------- --------- -------
Number of fee earners, including
Partners 484 422 15%
--------- --------- -------
Number of colleagues, excluding
Consultants 622 536 16%
--------- --------- -------
Colleague utilisation rate 65% 63% 3%
--------- --------- -------
Financial highlights
-- Strong profitable growth
o Revenue increased by 16% on an organic basis and by 3% on an
inorganic basis (APP and Wilson Field Group acquisitions)
o Growth was driven by an uptick in restructuring activity
levels
o Underlying adjusted EBITDA grew by 34% to GBP15.5m
-- Balance sheet strength maintained
o Net cash at 31 October 2023 of GBP11.7 million(2)
o Continued undrawn committed revolving credit facility ("RCF")
of GBP10 million, along with an accordion acquisition facility of
GBP15 million.
-- Increased interim dividend
o H1 2024 dividend of 1.8p (Q1 0.9p and Q2 0.9p), up 6% on prior
year
Operational highlights
-- Continued progress across five specialist service pillars:
o Restructuring
-- Administration appointments more than doubled in H1 2024 to
169 (H1 2023: 78) as market activity increased
-- Administration appointment market share grew to 20% by volume
which includes some group appointments. Underlying was circa. 15%
(H1 2023: 13%)
o FRP Corporate Finance (including Debt Advisory)
-- Continued to remain active in the mid market, completing 25
transactions in H1 2024 with a combined deal value of GBP537
million and GBP209 million of debt raised
-- Signs of an increase in debt refinancing and restructuring
related M&A activity
o Forensic Services
-- High level of activity across both investigations and
disputes
o Financial Advisory
-- Actively engaged in a range of assignments including option
reviews and transaction due diligence, supported by our valuations
and pensions advisory specialists
-- Seventh acquisition since IPO in March 2020
o Sheffield-based Wilson Field Group acquired in September 2023
for GBP4.8 million
o Wilson Field provides restructuring advisory and debt advisory
services to clients both locally and nationwide, supported by the
Wilson Field website and operational platform
o On an annual basis it is expected that Wilson Field's
underlying incremental contribution to FRP will be revenue of
GBP5.6 million and adjusted EBITDA of GBP1.1 million
o Two of the firm's Directors joined as Partners along with
their team of 63
-- Further investment in operational infrastructure
o Formal certification of International Standard ISO/IEC
27001:2013 issued in November 2023 c onfirming that FRP have put in
place a system to manage risks related to the security of data
owned or handled by the Group
-- Investment in colleagues
o FRP have launched a new leadership programme for 100
colleagues nationwide
o Continued investment in learning and development, including
the launch of a learning management system ("LMS")
o Consistent high level of staff retention within FRP compared
to the wider professional services industry (FRP voluntary
attrition this half 10%, H1 2023: 10%)
Outlook and current trading
-- The FRP team is experiencing increased demand for their
advice and we have leading positions in our core markets
-- The Restructuring Team are considerably more active this half
compared to the same period a year ago, with administration market
share gains
-- Trading to date has been positive and the Board expects to
exceed current consensus market expectations for FY 2024. If
current activity levels continue the Board expects the Company to
deliver revenue of GBP123m and adjusted EBITDA of GBP32m for FY
2024.
Key Performance Indicators ("KPIs")
Financial H1 2024 H1 2023
Revenue GBP58.7m GBP49.4m
--------- ---------
Underlying adjusted EBITDA(1) GBP15.5m GBP11.6m
--------- ---------
Cash collection (inclusive of GBP56.3m GBP52.0m
VAT where applicable)
--------- ---------
Adjusted profit before tax(3) GBP13.8m GBP10.2m
--------- ---------
Revenue per Partner for 6 months GBP0.7m GBP0.6m
--------- ---------
Non-Financial H1 2024 H1 2023
--------- ---------
Number of administration appointments 169 78
--------- ---------
Number of fee earners, including
Partners 484 422
--------- ---------
C olleague utilisation rate 65% 63%
--------- ---------
1) Underlying adjusted EBITDA removes exceptional costs and
non-cash costs including share-based payments relating to deemed
remuneration arising on acquisitions that is subject to continuing
employment and the Employee Incentive Plan established on IPO and
funded by Partners, resulting in no dilution to existing
shareholders. This is illustrated in the underlying adjusted EBITDA
table below.
2) GBP15.7m gross cash less GBP4.0m of structured debt (H1 2023:
GBP26.6m less GBP5.6m), repayable over two and a half remaining
years.
3) Adjusted profit before tax is reported profit before tax of
GBP13.8m (H1 2023: GBP10.2m) adjusted for share-based payments of
GBP2.3m (H1 2023: GBP4.5m) and exceptional items of GBPnil (H1
2023: GBP0.1m).
4) See note 4
Geoff Rowley, Chief Executive Officer of FRP Advisory Group plc,
said:
" I am proud of the team's achievements to date and FRP has
performed well in the first half. Our strategy is to ensure our
five service pillars and 28 locations are connected and work
together to provide solutions that achieve the best possible
outcomes, which supports our delivery of sustainable profitable
growth. Our total first half revenue growth was 19%, of which
organic revenue growth accounted for 16%, while underlying adjusted
EBITDA grew by of 34%.
Our Restructuring Team are considerably more active compared to
the same period last year and have increased their administration
market share. The Forensic Services team is expanding, and are
seeing an increase in demand for support on disputes and
investigations, often driven by fraud related matters or the need
for independent investigations. Financial Advisory and FRP
Corporate Finance (including Debt Advisory) remain active in the
mid-market and have a healthy H2 pipeline, although increased
caution among investors and lenders in the current environment is
also driving an increase in due diligence which means deals are
taking longer to complete. There is also an increase in debt
refinancing and restructuring related M&A activity.
As demand for our services continues to increase, we remain
committed to retaining our healthy collegiate culture where we
promote the development, health and well-being of our colleagues
and believe that we can best serve clients by ensuring colleagues
collaborate and help each other. FRP always aims to put forward the
right team, from the right services pillars and locations for each
project.
Trading to date has been positive and the Board expects to
exceed current consensus market expectations for FY 2024. FRP is
well positioned in our core markets, to support corporates through
their business cycle and the Board is confident of continued
progress."
Enquiries:
FRP Advisory Group plc
Geoff Rowley, CEO
Jeremy French, COO
Gavin Jones, CFO
Enquiries via MHP
Cavendish Capital Markets Limited (Nominated Adviser and Joint
Broker)
Katy Birkin/Stephen Keys/George Lawson (Corporate Finance)
Tel: +44 (0) 207 220 0500
Investec Bank plc (Joint Broker)
Carlton Nelson/James Rudd (Corporate Broking)
Tel: +44 (0) 207 597 4000
MHP (Financial Public Relations)
Oliver Hughes
Charlie Barker
Catherine Chapman
Tel: +44 (0) 783 462 3818
FRP@mhpgroup.com
Notes to Editors
FRP is a leading national specialist business advisory firm
established in 2010. It offers a range of advisory services to
companies, lenders, investors and other stakeholders, as well as
individuals. These services include:
-- Restructuring Advisory: corporate financial advisory, formal
insolvency appointments, informal restructuring advisory, personal
insolvency and general advice to all stakeholders.
-- Corporate Finance: mergers & acquisitions (M&A),
strategic advisory and valuations, financial due diligence, capital
raising, special situations M&A and partial exits.
-- 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.
-- Financial Advisory: transaction services including financial
due diligence, lender services, financial modelling, valuations,
pensions and company-side advisory services.
Management statement
The Group delivered another strong performance during H1 2024,
continuing to grow its revenues, profits and team. Revenue grew by
19% (GBP9.3m) which was primarily organic. This in turn led to an
increase in underlying adjusted EBITDA of 34% (GBP3.9m). The total
number of colleagues increased by 13% over H1 2024, due to
demand-led lateral hiring, and by 16% year-on-year, including
colleagues that joined the Group following the Wilson Field Group
acquisition in September 2023.
Operational review
The Group's multidisciplinary nature, with experts across
Restructuring Advisory, Corporate Finance, Debt Advisory, Forensic
Services and Financial Advisory, ensures that the business is
versatile, resilient and can offer tailored solutions to support
and advise clients throughout their entire lifecycle.
Restructuring
FRP continues to be one of the most active Restructuring
Advisory businesses in the UK, supporting clients on both stress
and distress situations where we create commercial solutions to
achieve the best possible outcome.
During the 2023 calendar year, the restructuring market has seen
an increase in activity levels, including administrations
approaching pre-pandemic levels. Companies with significant
borrowings who have rolled off lower interest rate arrangements are
now subject to much higher debt service costs, with interest rates
now considerably higher than the 2009-2021 period. Businesses are
also exposed to much higher levels of cost inflation. Certain
sectors such as construction, property, casual dining and food
service, retail, administrative and support services are finding
current trading conditions particularly challenging.
The Restructuring team serves the full range of UK clients
across all sectors, with a focus on the core mid-market, their
assignments range from personal clients and SMEs through to
higher-profile appointments.
Within the UK, the number of administrations in the first half
increased by 37% to 846 (H1 2023: 616). FRP's administration
appointments doubled year on year to 169 (H1 2023: 78). FRP's
administration appointment market share grew to 20%, although this
is slightly higher than our underlying share, circa 15%, due to
reported group appointments where FRP may be listed as the
administrator for many different entities in an overall group (H1
2023: 13%). Growth in the higher volume liquidations market, which
are typically lower value and less complex, has continued,
including Creditors Voluntary Liquidations ("CVLs") and Compulsory
Liquidations. There were 12,914 formal company insolvencies
(excluding Member Voluntary Liquidations) in England and Wales in
the six months to 31 October 2023. This was 8% higher than in the
six months to October 2022.
The source for all insolvency statistics are London and Regional
Gazettes.
Corporate Finance (including Debt Advisory)
FRP Corporate Finance continued to invest in external and
internal talent and recently announced six promotions within the
team, including two Partner promotions. In addition, Tim Spooner
joined as a Partner in the Bristol office, and Victoria Kisseleva
joined in London, with particular expertise in the beauty and
wellness sector.
Whilst deal volumes in the UK are down compared to the prior
year - reflecting the challenging conditions seen across the
broader economy - the team remained an active player in the
mid-market, and closed 25 transactions in H1 2024, with a combined
value of GBP537m and raising GBP209m of debt (H1 2023: 40 deals
with a combined value of GBP1.2bn and raising GBP552m of debt).
Notable deals in H1 2024 included:
-- The sale of CLC Group to HIG Group
-- The sale of The Vegner Group to Odevo
-- The refinancing of Bridge Farm Group
-- A GBP33 million committed debt facility for Slater & Gordon
Going into H2 2024, our pipeline of new opportunities remains
robust and we are continuing to see good levels of activity across
the national Corporate Finance practice. Whilst the mid-market in
which we operate is appearing to remain resilient - aided by the
availability of capital and an eagerness to deploy - there is a
clear flight to quality. Investors are understandably cautious and
requiring additional diligence, meaning deals are taking longer to
complete but there are signs that confidence is returning, and we
continue to work closely with the PE community having closed
transactions with 11 mid-market firms in H1 2024. As predicted, we
are seeing signs of an increase in debt refinancing and
restructuring related M&A activity.
Forensic Services
Forensic Services have seen a high level of activity across both
investigations and disputes. We have seen more assignments
requiring forensic accounting support and have hired more staff
across multiple locations to meet the increase in demand for our
services.
Financial Advisory
The team is actively engaged in a range of assignments including
option reviews and transaction due diligence, where stakeholders
are seeking more assurance on the viability of new investments and
refinancing, given the greater cost of capital and a higher risk
environment.
Our valuation specialists have been active with both mainstream
projects and preparing valuations which underpin restructuring
plans and schemes of arrangement.
Our pensions advisory specialists continue to work with trustees
and corporates, increasingly those moving towards buying-out
schemes with insurers to secure member benefits after the recent
changes in market conditions, as well as those navigating the
changing regulatory environment and its impact on corporate
transactions and scheme funding.
People and operations
At FRP we focus on the basics; delivering clear, honest advice
and always doing the right thing. Our reputation is built on our
colleagues helping stakeholders to achieve the best possible
outcome.
As a professional services business, we understand that our
people are central to our success and our most valuable asset. As
well as offering competitive financial rewards, we offer
opportunities for our team members to grow within the business and
reach their full potential. We believe highly engaged colleagues
deliver excellent client service and results, and in turn,
strengthen our reputation in the market.
We work hard to attract and retain highly skilled professionals
by creating a rewarding, high-performing environment. An Employee
Incentive Plan (EIP) was established on IPO in order to incentivise
employees under which options over ordinary shares were granted to
staff, vesting three years from IPO. The trust holding these
options is not eligible for dividends as rights were waived. On
vesting, the ordinary shares will gain rights to dividends.
In an increasingly competitive environment, we have continued to
recruit talented individuals to join FRP and help us grow in
targeted areas. Our team grew to 622 as at 31 October 2023,
representing 16% growth year-on-year, set out in the table
below.
31-Oct-23 30-Apr-23 31-Oct-22
Partners 88 78 80
---------- ---------- ---------
Other Fee earners 396 361 342
---------- ---------- ---------
Subtotal - Fee earners 484 439 422
---------- ---------- ---------
Support 138 112 114
---------- ---------- ---------
Total colleagues (ex Consultants) 622 551 536
---------- ---------- ---------
In May 2023 the Group promoted a record 12 colleagues to
Partner, part of a total 72 promotions across locations and our
five service pillars. Combined with our ongoing investments in
learning and development, this demonstrates the Group's long-term
commitment to developing talent and providing attractive career
paths. FRP have launched a new leadership programme for 100
colleagues nationwide, which complements an existing programme,
First in Leadership and Management ("FILM").
In November 2023, we announced a further 33 promotions across
our five service pillars and within the Central Services teams,
which included three new Partners and six new Directors.
Four lateral hire Partners were appointed to our Bristol, London
and Manchester offices between September and November 2023.
In June 2023, we opened an additional office in Salisbury, to
support continued team and business growth from our Southampton
office and the Wilson Field acquisition brought a second new
office, in Sheffield. Adding offices in selective new locations is
part of our growth strategy and as at October 2023, we have 27
locations (H1 2023: 26) in the UK and 1 in Cyprus. All offices
continue to work well together, drawing on specialists from our
five complementary service pillars as necessary, in order to
deliver the best possible service and outcome.
In September 2023, Glasgow Restructuring Partner, Michelle
Elliot won 'Corporate Leader of the Year' at the Scottish Women's
Awards.
The health, safety and wellbeing of all of our colleagues
remains a key priority. We feel that colleague interactions within
an office environment are important for learning and development,
team building and mental wellbeing. FRP has consistent high level
of staff retention compared to the wider professional services
industry (FRP voluntary attrition this half 10%, H1 2023: 10%).
The Group has been progressing projects to improve operational
efficiencies and risk management, enhancing internal controls which
include:
-- Together with enhancements to the Group's Information
Security Management System ("ISMS"), we were formally awarded ISO
27001 accreditation in October 2023. This confirms that FRP has put
in place a system to manage risks related to the security of data
owned or handled by the Group and that this system respects all of
the best practices and principles enshrined in this International
Standard.
-- The rollout of a new learning management system ("LMS"), and
continued planning around the launch of a document management
System ("DMS").
-- Updated finance system allows for improved efficiencies and internal controls.
Environmental, Social and Governance ("ESG")
As we navigate the complexities of the present and look to the
future, we remain committed to improving our sustainability and
climate resilience efforts. Our alignment with the Task Force on
Climate-related Financial Disclosures ("TCFD") guidelines serves as
evidence of our dedication to understanding and effectively
managing climate-related risks and opportunities.
We recognise that improvements have to be made and after the
appointment of a specialist Sustainability Manager, Alexis
Ioannidis in June 2023 our EcoVardis rating was upgraded to Silver,
putting FRP in the 87(th) percentile of companies. During H1 2024,
we have seen a 22% reduction in our Scope 1 emissions compared to
the prior year (sourced from the use of a company car fleet) and a
corresponding 7% reduction in our Scope 2 emissions (sourced from
the generation of purchased electricity, heat and steam). We have
also improved our emissions estimate calculations to account for
all Scope 3 categories and we are on track to publish a full
emissions inventory, along with our updated carbon reduction plan
in 2024. Finally, we are launching a waste reduction initiative in
H2 2024 to reduce our office printing numbers.
In addition, Alexis works within our Financial Advisory pillar
as a sustainability consultant and is currently advising an
investment conglomerate.
The ESG Committee ensures the Group has focus on relevant and
proportionate value creative ESG initiatives. We have committed the
Group to being Carbon Neutral by 2030. For further details please
see our website:
https://www.frpadvisory.com/about/approach/corporate-social-responsibility/environmental-social-and-governance/
FRP is a member of the UN Global Compact, whose aim is to
strengthen corporate sustainability worldwide. Over 23,500
companies across 167 countries participate and membership will
assist FRP to commit to, assess, define, implement, measure and
communicate our sustainability strategy.
FRP has committed to support charities or similar organisations
that provide aid for those who are homeless, in poverty, for
children's education, well-being and health and for environmental
issues. During H1 2024, we donated GBP23,600 to our professional
network's charity programmes, with colleagues raising an additional
GBP22,400. Notable colleague activities included Manchester's Josh
Richmond swimming the English Channel in a 6-person relay team,
collectively raising over GBP12,000 for the Children's Air
Ambulance and our London City office taking part in the Lord
Mayor's Appeal Charity's 'City Giving Day', raising GBP6,400, which
included a matched donation from FRP. A percentage of this total
was distributed to the Appeal, with the remainder to The Connection
at St Martin's in the Fields.
Selective acquisitions
FRP's strategy is to generate sustainable profitable growth by
combining a focus on organic growth with acquisitions that meet the
Group's selective criteria. The three acquisition criteria we focus
on are: cultural fit, strategic fit (within our five pillars/growth
region) and economic fit (acceptable transaction economics).
The Wilson Field Group was acquired in September 2023 for
GBP4.8m and this team serve clients both locally in Sheffield and
nationally through a digital platform. Integration of the business
continues as planned and their results and contribution for the
seven weeks post-acquisition are in line with the Board's
expectations.
Following an acquisition we treat the first 12 months'
contribution to the Group as inorganic, with contribution from
month 13 onwards becoming organic.
A strong financial performance and continued discipline
The Group delivered another strong performance during H1 2024,
continuing to grow revenue and underlying adjusted EBITDA. The
Group generated GBP58.7m in revenue in H1 2024, up by 19% or
GBP9.3m on the same period last year (H1 2023: GBP49.4m),
comprising organic growth of 16% and inorganic growth of 3%.
Underlying adjusted EBITDA was GBP15.5m, up 34% or GBP3.9m(H1 2023:
GBP11.6m).
Reported profit before tax for the period increased by 105% to
GBP11.5m (H1 2023: GBP5.6m) and was in line with the Board's
expectations. This was driven by both revenue increases and a
stable cost base. Converting unbilled revenue (also known as work
in progress or "WIP") to cash remains a top priority, however our
success in winning larger, more complex assignments can extend the
working capital cycle. As our activity levels have increased, there
has been an expected growth in our unbilled revenue although we
have consistently maintained our discipline around appropriate
valuation. The increase has arisen as FRP has been appointed on
new, large and/or complex administration assignments that have
assets other than cash (i.e. property) and/or a longer creditor
approval process before fees can be drawn. FRP continues to have a
strong track record of converting WIP into cash.
Dividend
Due to our continued profitability and cash position, in line
with our stated dividend policy, the Board declares an interim
dividend for Q2 2024 of 0.9p per eligible ordinary share. This
dividend will be paid on 22 March 2024 to shareholders on the
Company's register on 23 February 2024, with an ex-dividend date of
22 February 2024. This dividend takes the total for H1 2024 to 1.8p
per eligible share (H1 2023: 1.7p).
Going concern
During H1 2024, FRP has continued to grow profitably. The Group
had net cash of GBP11.7m (H1 2023: GBP21.0m) and an undrawn RCF of
GBP10m as at 31 October 2023. Net cash is calculated based on
GBP15.7m gross cash less GBP4.0m of structured debt (repayable over
approximately two and a half years). The Group also has an
accordion acquisition facility of GBP15m.
The Directors have made appropriate enquiries and consider that
the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the Directors
continue to adopt the going concern basis in preparing the
financial statement. Further detail on the assessment of going
concern can be found within note 2.3 of this interim financial
report.
Current trading and outlook
FRP is a resilient business, with a track record of growth
throughout the economic cycle. We have a robust business model and
our five complementary service pillars are available to support
clients throughout their entire lifecycle. This breadth of services
enables us to help clients review their operating models and adapt
or evolve as needed, in a fast-changing environment subject to many
disruptive and economic pressures.
The Restructuring Team are considerably more active this half
compared to the same period a year ago and have increased
administration market share. Companies with significant borrowings
who have rolled off lower interest rate arrangements are now
subject to much higher debt service costs, with interest rates now
considerably higher than the 2009-2021 period. Businesses are also
exposed to much higher levels of cost inflation . FRP continues to
be one of the most active Restructuring Advisory businesses in the
UK, supporting clients on both stress and distress situations where
we create commercial solutions to achieve the best possible
outcome. Certain sectors such as construction, property, casual
dining and food service, retail, administrative and support
services are finding current trading conditions particularly
challenging.
The Forensic services team is expanding, and are seeing an
increase in demand for support on disputes and investigations,
often driven by fraud related matters or the need for independent
investigations.
Financial Advisory are supporting on range of assignments
including option reviews and transaction due diligence, where
stakeholders are seeking more assurance on the viability of new
investments and re-financing given the greater cost of capital and
a higher risk environment. Our valuation specialists have been
active with both mainstream projects and preparing valuations which
underpin restructuring plans and schemes of arrangements.
FRP Corporate Finance (including Debt Advisory) remains active
in the mid-market and have a healthy H2 pipeline, although
increased caution among investors and lenders in the current
environment is also driving an increase in due diligence which
means deals are taking longer to complete. There is also an
increase in debt refinancing and restructuring related M&A
activity.
The group has a strong balance sheet and available facilities to
support continued growth.
Trading to date has been positive and the Board expects to
exceed current consensus market expectations for FY 2024. If
current activity levels continue the Board expects the Company to
deliver revenue of GBP123m and adjusted EBITDA of GBP32m for FY
2024.
Geoff Rowley Nigel Guy
Chief Executive Officer Non-Executive Chairman
Underlying adjusted results
For the six months ended 31 October 2023
Calculation of underlying adjusted EBITDA
(Earnings Before Interest Tax Depreciation and Amortisation)
(restated)
GBPm H1 2024 H1 2023 FY 2023
------------------------------------------------------- ---------------- --------------- ---------------
Reported profit before tax (PBT) 11.5 5.6 15.6
Add interest, depreciation, amortisation 1.7 1.4 2.9
Reported EBITDA 13.2 7.0 18.5
------------------------------------------------------- ---------------- --------------- ---------------
Add exceptional items - 0.1 0.1
Add share-based payment expense relating to the
Employee Incentive Plan 1.6 3.3 6.3
Add share-based payment expense - deemed remuneration 0.7 1.2 2.1
Underlying adjusted EBITDA 15.5 11.6 27.0
------------------------------------------------------- ---------------- --------------- ---------------
At present the Company has expensed in H1 2024 but not
underlying adjusted EBITDA for:
Ø Employers National Insurance due to the EIP awards when the
options vest, GBP0.4m (H1 2023: GBP0.9m) accrued in the period.
Consolidated statement of comprehensive income
For the six months ended 31 October 2023
Restated
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
30 Apr
31 Oct 23 31 Oct 22 23
Notes GBP million GBP million GBP million
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Revenue 58.7 49.4 104.0
Personnel
costs (33.0) (32.3) (64.3)
Depreciation
and
amortisation (1.3) (1.2) (2.5)
Other
operating
expenses (12.5) (10.0) (21.1)
Exceptional
costs 3 - (0.1) (0.1)
Operating
profit 11.9 5.8 16.0
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Finance income 0.2 0.1 0.2
Finance costs (0.6) (0.3) (0.6)
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Net finance
costs (0.4) (0.2) (0.4)
Profit before
tax 11.5 5.6 15.6
Taxation (2.7) 0.3 (2.9)
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Profit for the
period 8.8 5.9 12.7
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Total
comprehensive
income
for the
period 8.8 5.9 12.7
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Earnings per
share (in
pence)
Total 4 3.53 2.38 5.13
Basic 4 3.76 2.68 5.58
Diluted 4 3.64 2.50 5.33
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
Adjusted
earnings per
share
(in pence)
Total 4 4.20 3.35 7.83
Basic 4 4.49 3.76 8.52
Diluted 4 4.34 3.51 8.14
--------------- ------ ----------------------------------- -------------------------------- ---------------------------
All results derive from continuing operations.
Consolidated statement of financial position
For the six months ended 31 October 2023
Restated
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Notes GBP million GBP million GBP million
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Non-current
assets
Goodwill 12.7 10.2 10.8
Other
intangible
assets 2.3 0.7 0.6
Property,
plant and
equipment 2.5 2.7 2.5
Right of use
asset 6.0 5.6 6.5
Deferred tax
asset 1.6 4.7 2.5
Total
non-current
assets 25.1 23.9 22.9
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Current
assets
Trade and
other
receivables 6 68.5 48.5 58.3
Cash and cash
equivalents 15.7 26.6 27.7
Total current
assets 84.2 75.1 86.0
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Total assets 109.3 99.0 108.9
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Current
liabilities
Trade and
other
payables 7 26.6 26.1 29.7
Loans and
borrowings 1.6 1.6 1.6
Lease
liabilities 1.6 1.7 1.2
Total current
liabilities 29.8 29.4 32.5
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Non-current
liabilities
Trade and
other
payables 7 5.1 5.4 4.8
Loans and
borrowings 2.4 4.0 3.2
Lease
liabilities 4.5 4.0 5.3
Total
non-current
liabilities 12.0 13.4 13.3
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Total
liabilities 41.8 42.8 45.8
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Net assets 67.5 56.2 63.1
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Equity
Share capital 0.2 0.2 0.2
Share premium 33.7 31.5 32.0
Treasury
shares
reserve (0.0) (0.0) (0.0)
Share-based
payment
reserve 1.9 2.9 1.3
Merger
reserve 1.3 1.3 1.3
Retained
earnings 30.4 20.3 28.3
Shareholders
equity 67.5 56.2 63.1
-------------- ------ ---------------------------------- ---------------------------------- ----------------------------------
Approved by the Board and authorised for issue on 11 December
2023.
Jeremy French Gavin Jones
Director, COO Director, CFO
Company Registration No. 12315862
Consolidated statement of changes in equity
For the six months ended 31 October 2023
Called Share Treasury Share-based Merger Retained Total
up share premium share payment reserve earnings equity
capital account reserve reserve
GBP GBP GBP GBP GBP GBP GBP
million million million million million million million
-------------- ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Balance at 31
October
2022
(unaudited)
(restated) 0.2 31.5 (0.0) 2.9 1.3 20.3 56.2
Profit for
the half
year - - - - - 6.8 6.8
Other
movements - - 0.0 - - (0.0) -
Dividends - - - - - (3.8) (3.8)
Issue of
share
capital 0.0 0.5 - - - - 0.5
Share-based
payment
expense - - - 3.0 - - 3.0
Deemed
remuneration
additions - - - (1.0) - - (1.0)
Deemed
remuneration
charge - - - 1.4 - - 1.4
Transfer to
retained
earnings - - - (5.0) - 5.0 -
Balance at 30
April
2023
(audited) 0.2 32.0 (0.0) 1.3 1.3 28.3 63.1
-------------- ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Profit for
the half
year - - - - - 8.8 8.8
Dividends - - - - - (6.7) (6.7)
Issue of
share
capital 0.0 1.7 - - - - 1.7
Other
movements - - 0.0 - - (0.0) -
Share-based
payment
expense - - - 1.6 - - 1.6
Deemed
remuneration
additions - - - (1.7) - - (1.7)
Deemed
remuneration
charge - - - 0.7 - - 0.7
Balance at 31
October
2023
(unaudited) 0.2 33.7 (0.0) 1.9 1.3 30.4 67.5
-------------- ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Consolidated statement of cash flows
For the six months ended 31 October 2023
Restated
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
GBP million GBP million GBP million
--------------------- ----------------------------------- ---------------------------------- ----------------------------------
Cash flows from
operating activities
Profit before
taxation 11.5 5.6 15.6
Depreciation,
amortisation and
impairment (non
cash) 1.3 1.2 2.5
Share-based
payments: employee
options (non cash) 1.6 3.3 6.3
Share-based
payments: deemed
remuneration
(non cash) 0.7 0.7 2.1
Net finance expenses 0.4 0.2 0.4
Increase in trade
and other
receivables (7.5) (2.6) (11.6)
Decrease in trade
and other payables (1.5) (5.1) (2.2)
Tax paid (5.4) (0.2) (2.0)
Net cash from
operating
activities 1.1 3.1 11.1
--------------------- ----------------------------------- ---------------------------------- ----------------------------------
Cash flows from
investing activities
Purchase of tangible
assets (0.2) (0.3) (0.6)
Acquisition of
subsidiaries less
cash acquired (4.1) (0.4) (1.6)
Interest received 0.2 0.0 0.2
Net cash used in
investing
activities (4.1) (0.7) (2.0)
--------------------- ----------------------------------- ---------------------------------- ----------------------------------
Cash flows from
financing activities
Gross Proceeds from
share sales - 7.5 7.5
Dividends (6.8) (6.0) (9.8)
Principal elements
of lease payments (1.0) (0.7) (1.4)
Repayment of loans
and borrowings (0.8) (1.2) (2.0)
Interest paid (0.4) (0.3) (0.6)
Net cash used in
financing
activities (9.0) (0.7) (6.3)
--------------------- ----------------------------------- ---------------------------------- ----------------------------------
Net
(decrease)/increase
in cash
and cash
equivalents (12.0) 1.7 2.8
Cash and cash
equivalents at the
beginning of the
period 27.7 24.9 24.9
Cash and cash
equivalents at
the end of the
period 15.7 26.6 27.7
--------------------- ----------------------------------- ---------------------------------- ----------------------------------
Notes to the Financial Statements
For the six months ended 31 October 2023
1. General information
FRP Advisory Group plc (the "Company") and its subsidiaries'
(together "the Group") principal activities include the provision
of specialist business advisory services for a broad range of
clients, including restructuring and insolvency services, corporate
nance, debt advisory, forensic services and financial advisory.
The Company is a public company limited by shares registered in
England and Wales and domiciled in the UK. The address of the
registered of ce is 110 Cannon Street, London, EC4N 6EU and the
company number is 12315862.
2. Basis of preparation and accounting policies
The condensed consolidated financial information is prepared in
sterling, which is the presentational currency of the Company.
Amounts in this nancial information are rounded to the nearest
GBP0.1 million.
The condensed consolidated financial information has been
prepared on the basis of Company accounting policies and should be
read in conjunction with the Group's last annual consolidated
financial statements.
This financial information does not include all of the
information required for a complete set of IFRS financial
statements.
This condensed consolidated H1 2024 financial information does
not comprise statutory accounts within the meaning of Section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
April 2023 were approved by the Board of Directors on 25 July 2023
and delivered to the Registrar of Companies. The report of the
auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report and did not contain
statements under section 498 (2) or (3) of the Companies Act
2006.
2.1 Basis of consolidation
The nancial statements incorporate the results of FRP Advisory
Group plc and all of its subsidiary undertakings as at 31 October
2023.
FRP Advisory Group plc is the 100% shareholder of FRP Advisory
Trading Limited. FRP Advisory Trading Limited has twelve wholly
owned subsidiaries, FRP Advisory Cyprus, APP Audit Co Limited, FRP
Debt Advisory Limited, FRP Corporate Finance Limited, FRP Corporate
Advisory Limited, Litmus Advisory Limited, Abbott Fielding Limited,
JDC Accountants & Business Advisors Limited, JDC Holdings
Limited, Spectrum Corporate Finance Limited, BridgeShield Asset
Management Limited and Wilson Field Group Limited. FRP Advisory
Trading Limited is also a member of FRP Advisory Services LLP and
Apex Debt Solutions LLP. JDC Holdings Limited has two subsidiaries,
Jon Dodge & Co Limited and Walton Dodge Forensic Limited.
Wilson Field Group limited has two subsidiaries, Wilson Field
Limited and WF Financial Solutions. FRP has 100% of the economic
interest in JDC Accountants & Business Advisors Ltd and APP
Audit Co Limited.
2.2 Significant accounting policies
Accounting policies adopted in preparation of the H1 2024
condensed consolidated financial statements are consistent with
those followed in the preparation of the Group's annual financial
statements for the year ended 30 April 2023.
2.3 Going concern
The business has been, and is currently, both pro table and cash
generative. It has consistently grown year on year and has proven
to be resilient, growing in both periods of economic growth and
recession.
At period end the Group had net cash of GBP11.7m. The Group also
has available an undrawn GBP10m committed revolving credit
facility. Ongoing operational cash generation and this cash balance
mean we have suf cient resources to both operate and move swiftly
should acquisition opportunities arise.
The quality of client service, strong referral network and
barriers to enter the market, together with the strong cash
position, make the Board con dent that the Company will continue to
grow. In terms of diversi cation, of ces can adapt quickly to
supporting each other and work on both higher value assignments or
higher volume lower value jobs. Financial Advisory, Forensic
Services, Corporate Finance and Debt Advisory can equally support
the Restructuring Advisory offering and also earn fees
autonomously.
In the unlikely event that the business has a signi cant
slowdown in cash collections, the business has a number of further
options available to preserve cash.
Having due consideration of the nancial projections, the level
of structured debt and the available facilities, it is the opinion
of the Directors that the Group has adequate resources to continue
in operation for a period of at least 12 months from signing these
financial statements and therefore consider it appropriate to
prepare the Financial Statements on the going concern basis.
2.4 Restatement of prior period results
The restatement of prior period results is the reclassification
of GBP0.2m of costs relating to the issue of share capital from
exceptional costs to offsetting with share premium.
3. Exceptional costs
Exceptional costs in the prior period relate to the placing in
June 2022, which included an extension of the lock-in for
Partners.
4. Earnings per share ("EPS")
The EPS has been calculated using the pro t for the year and the
weighted average number of ordinary shares outstanding during the
year, as follows:
Adjusted
EPS EPS EPS Adjusted EPS
GBPm H1 2024 H1 2024 H1 2023 H1 2023
-------------------------- ------------------------- ------------------------------ -----------------------
Reported
Profit
after tax 8.8 8.8 5.9 5.9
Add
Exceptional
items - - - 0.1
Add
Share-based
payments - 2.3 - 4.5
Less
deferred
tax - (0.6) - (2.2)
Adjusted
Profit
after tax 8.8 10.5 5.9 8.3
Total
average
shares in
issue 249,813,394 249,813,394 247,448,913 247,448,913
Total share
EPS (pence) 3.53 4.20 2.38 3.35
------------- -------------------------- ------------------------- ------------------------------ -----------------------
Weighted
average
shares in
issue
excluding
EBT 234,015,204 234,015,204 220,504,872 220,504,872
Basic EPS
(pence) 3.76 4.49 2.68 3.76
------------- -------------------------- ------------------------- ------------------------------ -----------------------
Dilutive
potential
ordinary
shares
under share
option
schemes 7,827,995 7,827,995 15,213,834 15,213,834
Weighted
diluted
shares in
issue 241,843,199 241,843,199 235,718,706 235,718,706
Diluted EPS
(pence) 3.64 4.34 2.50 3.51
------------- -------------------------- ------------------------- ------------------------------ -----------------------
The Employee Bene t Trust does not have an entitlement to
dividends, holding 15,798,190 (H1 2023: 26,944,041) shares of the
above 249,813,394 (H1 2023: 247,448,913) ordinary shares.
5. Dividend
The Board declared an interim dividend for Q2 2024, the period
to 31 October 2023 of 0.9p per eligible* share. This dividend will
be paid on 22 March 2024 to shareholders on the Company's register
on 23 February 2024, with an ex-dividend date of 22 February
2024.
*An Employee Incentive Plan (EIP) established on IPO was used to
grant options to staff. The trust holding these shares is not
eligible for dividends, rights were waived. The options vested from
March 2023 onwards, and gain rights to dividends.
6. Trade and other receivables
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Trade and
other
receivables GBP million GBP million GBP million
---------------------------------- ---------------------------------- ----------------------------------
Trade
receivables 7.6 6.0 7.9
Other
receivables 4.5 2.4 4.6
Unbilled
revenue 56.4 40.1 45.8
68.5 48.5 58.3
---------------------------------- ---------------------------------- ----------------------------------
The ageing profile of non-related party trade
receivables is as follows:
As at As at As at
31 Oct 23 31 Oct 22 30 Apr 23
Due in GBP million GBP million GBP million
---------------------------------- ---------------------------------- ----------------------------------
<30 Days 5.0 3.0 4.1
30-60 Days 0.3 1.0 1.6
60-90 Days 0.3 0.3 0.8
>90 Days 2.0 1.7 1.4
Total 7.6 6.0 7.9
---------------------------------- ---------------------------------- ----------------------------------
7. Trade and other payables
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Current
liabilities GBP million GBP million GBP million
---------------------------------- ---------------------------------- ----------------------------------
Trade
payables 3.0 0.7 1.9
Other taxes
and social
security
costs 4.0 5.7 8.4
Liabilities
to Partners
go forward 11.4 10.9 10.3
Other
payables
and
accruals 8.2 8.8 9.1
26.6 26.1 29.7
---------------------------------- ---------------------------------- ----------------------------------
Unaudited Unaudited Audited
6 months 6 months
ended ended Year Ended
31 Oct 23 31 Oct 22 30 Apr 23
Non-current
liabilities GBP million GBP million GBP million
---------------------------------- ---------------------------------- ----------------------------------
Other
payables
and
accruals 0.6 1.1 0.7
Partner
capital 4.5 4.3 4.1
5.1 5.4 4.8
---------------------------------- ---------------------------------- ----------------------------------
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END
IR DGBDDBGBDGXB
(END) Dow Jones Newswires
December 12, 2023 02:00 ET (07:00 GMT)
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