TIDMRBGP
RNS Number : 7767S
RBG Holdings PLC
18 July 2022
18 July 2022
RBG Holdings plc
("RBG" or the "Group")
Pre-Close Trading 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 six months ending 30 June 2022 on
13 September 2022.
The Board is pleased to announce that the Group continues to
trade in line with current market expectations*.
RBG Legal Services Limited ("RBGLS")
RBG's legal services division, RBGLS, holds the Company's two
client-facing brands of 'Rosenblatt', for contentious legal
services, and 'Memery Crystal', for non-contentious legal services.
Overall, RBGLS has performed well with a particularly strong
performance in its Corporate and Banking practices.
The integration of RBGLS (and within that the Rosenblatt and
Memery Crystal brands) is complete with the businesses set to move
to a new practice management software system in the last quarter of
2022 to support the integration and the potential for future
cross-sell initiatives.
Pleasingly, because of management actions to date, the EBITDA
margin of Memery Crystal has improved by 10% to 27%. The EBITDA
margin of RBGLS is 30% and is expected to rise towards 35% over the
medium-term as the benefits of the integrated business are fully
maximised. The advantages are two strong brands, greater scale, and
the creation of what the Group considers to be a leading mid-tier
law firm.
Convex Capital Limited ("Convex Capital")
The Group's specialist sell-side corporate finance boutique has
continued its strong performance into 2022. As at 30 June 2022,
Convex Capital had completed five deals generating revenue of
GBP4.2 million (2021: 8 deals, revenue of GBP5.0 million).
Furthermore, as at 18 July 2022, Convex Capital has a strong
pipeline of 20 deals with a number currently at various stages of
completion. It is the Board's expectation that the current
macro-economic environment will support the ongoing fundamentals
that drive M&A.
Litigation Finance
Since its launch in May 2020, LionFish Litigation Finance
Limited ("LionFish") has invested in 12 cases, with one case having
settled successfully in 2021. Current active cases have a total
capital commitment of GBP11.3 million of which GBP5.5 million has
been deployed (as at 30 June 2022). Disposals since inception total
GBP5.9 million.
In February 2022, LionFish agreed a GBP20.0 million litigation
investment arrangement with a large alternative investment firm
which will provide the business with flexible capital. They will
invest 75% on any new deals and have retrospectively invested
GBP2.0 million in existing cases in Rosenblatt and LionFish.
This year, LionFish is expected to generate the majority of its
gains from potential settlements, the timings of which are not
within RBG's control and are thus difficult to predict.
Balance Sheet
The integration of Memery Crystal has progressed to plan with
the expected synergies having a positive impact on the wider Group.
Consequently, the Group has already paid back GBP2.0 million of the
GBP10.0 million term loan used to fund the acquisition (in addition
to GBP5.6 million in deferred cash consideration). The term loan
will be paid down over five years. Furthermore, the Group has used
GBP10.0 million of its GBP15.0 million revolving credit facility as
the Group's working capital requirements have doubled since the
acquisition of Memery Crystal. As a result, the Group's balance
sheet remains in line with expectations with net debt at GBP17.2
million (2021: GBP10.0 million). Headroom remains sufficient to
support the Group's growth plans.
Dividend
The Company will announce the details of its interim dividend
when it publishes its financial results in September.
Commenting Group CEO Nicola Foulston, said: "Having delivered
the upgraded market expectations for the 2021 financial year, we
are pleased with the continued solid trading performance of the
Group. Macro-economic conditions are volatile, and we are conscious
of the ever-changing economic environment. However, our diversified
strategy helps provide resilience and protection through a broad
revenue base that is not dependent on any one sector. The
integration of Memery Crystal and Rosenblatt has been a success
with improved operating efficiency driving higher margins.
"Our Litigation Finance business continues to develop and offers
the potential for substantial returns for shareholders. Finally,
our M&A business, Convex Capital, continues to perform well and
is converting its pipeline. We are confident about the long-term
prospects of the Group."
*RBG understands that consensus market expectations for the year
ended 31 December 2022 (excluding outliers) are for revenues of
GBP56.2 million, Adj. EBITDA of GBP17.3 million and Adj. PBT of
GBP13.1 million ( Source: FactSet) .
Enquiries:
RBG Holdings plc Via SEC Newgate
Nicola Foulston, CEO
Singer Capital Markets (Nomad and Broker) Tel: +44 (0)20 7496
Rick Thompson / Alex Bond / James Fischer 3000
(Corporate Finance)
Tom Salvesen (Corporate Broking)
SEC Newgate (for media enquiries) Tel: +44 (0)7540 106366
Robin Tozer/Richard Bicknell rbg@secnewgate.co.uk
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 ("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.
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.
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