TIDMFRP
RNS Number : 3347Z
FRP Advisory Group PLC
15 May 2023
FRP Advisory Group plc
("FRP" or the "Group")
Full Year Trading Update
Continued profitable growth and well placed to service
increasing demand
FRP Advisory Group plc, a leading national specialist business
advisory firm, announces a trading update for the full year ended
30 April 2023 ("FY 2023").
Trading performance
The Group continued to grow profitably with all five service
pillars contributing strongly. The connection of our colleagues
across different pillars is a key point of differentiation at FRP.
The Group ensures the right team from the right service line and
locations are working on each project, to secure the optimal
outcome for our clients.
The Group expects to report revenues for the full year to 30
April 2023 of GBP104 million, up 9% on the prior year (FY 2022:
GBP95.2 million), and adjusted underlying EBITDA* of GBP27 million,
up 5% on the prior year (FY 2022: GBP25.7 million), both slightly
ahead of current market consensus**.
Update on our service pillars
The Restructuring team serves the full range of UK clients
across all sectors, with assignments ranging from personal clients,
SMEs to larger corporates.
Growth in the higher volume liquidations market, which are
typically lower value and less complex, continues, including
Creditors Voluntary Liquidation's ("CVLs") and Compulsory
Liquidations. Whilst the restructuring administration market has
remained below pre-pandemic levels for a significant part of the
year, the Group slightly increased its administration market share
to 14% (FY 2022: 13%, Source: London and Regional Gazettes) and has
seen encouraging levels of activity during Q4 FY 2023. Given the
long list of well documented headwinds facing UK corporates
including continuing interest rate rises, supply chain disruption,
input cost inflation (i.e. wages, energy, supplies and materials),
Brexit and the withdrawal of pandemic support measures, it is
expected that the administration market should experience greater
volumes during financial year 2024 and FRP is well placed to serve
this market.
Outside of the formal insolvency market, FRP has seen an
encouraging increase in demand for confidential advisory projects
and enquiries for restructuring services; this includes a number of
mandates seeking to utilise the Restructuring Plan. This mechanism
was introduced into law in 2020 and after a relatively hesitant
start is now starting to be a useful addition to the restructuring
toolkit. The Group expects that demand for the Group's overall
restructuring advisory services will continue to increase.
FRP Corporate Finance successfully closed 73 transactions in FY
2023 with an aggregate deal value of GBP1.8 billion and GBP0.8
billion of debt raised. FRP was the 13(th) most active M&A
adviser in the UK by deal volume, maintaining its position in the
market (source: Experian's MarketIQ) . An average deal value of
GBP25 million for the year places FRP Corporate Finance in the
heart of the UK SME market.
The progress achieved within our Corporate Finance business was
recognised by a significant win at the National Real Deals Private
Equity Awards 2023 when it was named 'UK Corporate Finance House of
the Year.' The team also strengthened its brand presence with the
launch of a new dedicated website. The new financial year commences
with a healthy pipeline; although deals are taking longer to close
due to more transaction due diligence and scenario analysis given
the increased cost of borrowing and inflation, reflecting a more
cautious attitude of buyers and capital providers.
During the year a Financial Advisory pillar was launched within
the Group. It includes financial and pre-lending review services,
financial modelling expertise and wider transaction services
including financial due diligence for buy-side and sell-side
transactions; these services have been developed in response to
market demand from Institutional Lenders and Private Equity. The
pillar also includes our Valuation services, which are often
involved in complex restructuring assignments, and Pensions
Advisory services. Since launch, Colleagues within Financial
Advisory have been active across all of these services and demand
continues to be strong.
Our Forensic Services pillar has seen an increase in work in
2023 across both forensic accounting and forensic technology.
Notable recent assignments include independent investigations at
WANDisco plc and Inland Homes plc.
Balance sheet
The Group's balance sheet remains strong with an unaudited net
cash balance as at 30 April 2023 of GBP22.9 million (FY 2022:
GBP18.1 million). The Group also has an undrawn revolving credit
facility (RCF) available of GBP10 million with Barclays Bank. This
enables the Group to act swiftly on any acquisitions that meet
FRP's criteria: Cultural alignment and Strategic fit, together with
mutually acceptable economics.
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
FRP grew its team during the year by over 9% to 551 Colleagues.
The growth included the acquisition of a team in Cyprus, which
strengthens our international presence and supports our work with
global advisory organisation Eight International, enabling us to
better support our clients on international matters.
FY 2023 FY 2022
P artners 78 80
-------- --------
Other F ee earners 361 317
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S ubtotal - Fee earners 439 397
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S upport 112 107
-------- --------
T otal Colleagues (excluding consultants) 551 504
-------- --------
Developing talent and managing succession is a key focus of the
Group. To that end, immediately following our year end on 1 May
2023, 12 internal promotions to Partner were announced, which were
part of a total of 72 promotions across the Group. This was a
record number of promotions and, when combined with our ongoing
investments in Learning and Development, demonstrates the Group's
long-term commitment to developing talent and providing attractive
career paths.
FRP's offices, across 25 locations in the UK and 1 international
location in Cyprus, continue to work well together, drawing on
specialists from different service lines as necessary, to resource
each assignment with the right team to deliver the best possible
service and outcome.
Notice of results
The Group expects to report its audited results for the full
year ended 30 April 2023 on 26 July 2023 .
Geoff Rowley, Chief Executive Officer of FRP Advisory Group plc,
said:
"The Group made excellent progress in the financial year to 30
April 2023, continuing to execute our growth strategy. The results
achieved are an ongoing testament to the quality of our colleagues
and their continued efforts to provide a high-quality service, to
order to achieve the best possible results for our clients. On
behalf of the Board, I wish to express my gratitude for the
contribution made by our entire team.
Whilst the UK economy continues to be impacted by uncertainty,
FRP remains well placed to serve our clients across the entire
economic life cycle and we will continue to invest to ensure we are
able to develop our team and client offerings. Recent activity
levels have been encouraging and we start our new financial year
with confidence.
The medium-term outlook for our markets remains positive and we
have sufficient resource flexibility to respond to an increase in
demand for our services.
The Board is confident of making further progress in the current
financial year."
* Adjusted underlying EBITDA 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.
** Current consensus market expectations for revenue and
adjusted EBITDA of GBP100.5 million and GBP25.8 million
respectively for FY 2023.
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 Joint Broker)
Katy Birkin / Max Gould (Corporate Finance)
Alex Pollen (Sales)
Tel: +44 (0) 207 397 8900
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
Pete Lambie
Tel: +44 (0) 3128 8540 / +44 (0) 20 3128 8570
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, 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.
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END
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