TIDMRBGP

RNS Number : 1817Z

RBG Holdings PLC

13 September 2022

13 September 2022

RBG Holdings plc

("RBG", the "Group", or the "Company")

Unaudited Interim Results for the six months ended 30 June 2022

Solid performance delivered by resilient business model

RBG Holdings plc (AIM: RBGP), the professional services group, is pleased to announce its unaudited results for the six months ended 30 June 2022.

Group Financial Highlights [1] :

-- Revenue (including gains from litigation assets) up 44.8% to GBP26.6 million (2021: GBP18.3 million)

o GBP1.7 million of gains from litigation assets (2021: GBP1.5 million)

   --      EBITDA up 31.8% to GBP6.8 million (2021: GBP5.2 million) 

o EBITDA margin is 25.6% (2021: 28.1%)

   --      Profit before tax up 10.8% to GBP4.4 million (2021: GBP3.9 million) 
   --      Profit after tax up 13.3% to GBP3.5 million (2021: GBP3.1 million) 
   --      Earnings per share up 4.4% to 3.62 pence (2021: 3.47 pence) 
   --      Adjusted free cash flow generation in the period was GBP3.1 million (2021: GBP2.2 million) 
   --      Net debt of GBP17.3 million (2021: net debt of GBP9.8 million) 

-- An interim dividend of 2 pence per share in respect of the six months to 30 June 2022 will be paid on the 30 November 2022

Business Highlights:

RBG Legal Services Limited ("RBGLS") - Combination of the Rosenblatt and Memery Crystal brands

-- Revenue (including gains from litigation assets) up 74.2% to GBP22.3 million (2021: GBP12.8 million)

   --      Legal services revenue up 74.9% to GBP20.7 million (2021: GBP11.8 million) 
   --      EBITDA up 62.6% to GBP6.8 million (2021: GBP4.2 million) 

-- EBITDA margin is 30.7% (2021: 32.9%) with the decrease driven by the changing revenue mix, as anticipated, following the acquisition of Memery Crystal

-- Successfully realised litigation asset sales with proceeds totalling GBP2.3 million (2021: GBP1.6 million)

-- Average revenue per fee earner of GBP363,000 (2021: GBP375,000) reflects the diversification of the legal services business into more non-contentious areas of law, following the acquisition of Memery Crystal

-- Total lockup was 120 days (2021: 102 days) of which debtor days were 51 (2021: 46) with the increase driven by the mix of the business following the acquisition of Memery Crystal

-- As at 30 June 2022, RBGLS had invested in 13 litigation cases with an associated contingent WIP of GBP12.5 million (2021: GBP5.8 million) and a total cash investment of GBP9.3 million (GBP4.9 million)

Convex Capital Limited ("Convex Capital")

-- M&A activity has been strong in 2022: As at 30 June 2022, Convex had completed five deals resulting in revenue of GBP4.2 million (2021: GBP5.0 million)

-- Strong pipeline as at 8 September 2022: 24 active deals, of which three are in late stages of the completion process

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

Operational and Strategic Highlights:

-- New RBGLS COO Jon Divers, appointed in February 2022, has recently been confirmed in position and has full day-to-day operational responsibility for the legal services division

-- Memery Crystal business transferred into one legal entity, RBGLS, which completed 1 September 2021

-- The integration is almost complete with both businesses migrating onto a single practice management system which is expected to be complete in the fourth quarter of 2022

-- With this integration, management has successfully delivered on a key part of the Group's strategy which is to acquire high-value, strategically additive assets and improve their performance

-- The combination of Memery Crystal with the Group's pioneering law firm Rosenblatt means the Group now has one of London's premier mid-tier law firms

-- The Group continues to pursue acquisition opportunities to build and diversify the business to create long term shareholder value, where financing allows, in line with its M&A strategy

-- A number of acquisition opportunities have been identified which adhere to the Group's highly selective criteria and the Group continues to make progress on these

Outlook:

-- The Group has had another solid six months which is reflected in improved revenue and profit growth

-- The Group's revenues and EBITDA have historically been second half weighted on an organic (and standalone) basis. With consistent demand for all the Group's services we are currently on track to meet our expectations for the full year

Nicola Foulston, CEO, RBG Holdings plc, commented: " Overall, the Group has had a solid first six months which is reflected in our continued revenue and profit growth. Our diversified revenue model has proved to be resilient in these uncertain times. We have built a strong platform from which to deliver growth over the coming years.

"Our legal services business integration is almost complete with two trading brands; Rosenblatt for contentious law and Memery Crystal for non-contentious law. We are building one of London's premier mid-tier law firms providing quality advice to entrepreneurs and high-net-worth individuals. The business is receiving a high volume of new client instructions enabled by our expertise and increased scale. All our legal services businesses have seen consistent growth and steady flow of activity with our Corporate, Real Estate, and Dispute Resolution practices having all performed well.

"LionFish continues to grow and is funding eleven active cases. By selling a percentage of the invested assets, it has generated profit from day one of its inception as well as helping to de-risk the Group's investment. The new litigation investment arrangement will provide the business with flexible capital to support its growth rather than the Group's balance sheet.

"Our M&A advisory business, Convex Capital, has performed well in the first six months with five deals completing and remains well-positioned to benefit in the current macro-economic environment.

"With consistent demand for all Group services, we are on track to meet our expectations for the full year. While acknowledging the economic conditions continue to be volatile, we look forward to the next six months with optimism and are excited about the long-term prospects for the Group."

Concert Party

The Company set out specifics of a concert party in its Admission Document, published 2 May 2018 ("Existing Concert Party"). Following consultation with the Takeover Panel, the Existing Concert Party has now been disbanded and two sub-concert parties formed (the "Sub-Concert Parties"). The individuals within each Sub-Concert Party, together with their interests in the issued share capital of the Company as at 12 September 2022, are set out below:

 
                              Interest         Interest 
                         (No. Ordinary   (% of Ordinary 
                               Shares)          Shares) 
---------------------   --------------  --------------- 
 
 Sub-Concert Party 1 
 Cascades Limited*          11,410,000           11.97% 
 NF SIPP*                      105,264            0.11% 
                        --------------  --------------- 
 Total                      11,515,264           12.08% 
 
 Sub-Concert Party 2 
 Mr Ian Rosenblatt          16,911,214           17.74% 
 Ms Tania MacLeod            1,305,000            1.37% 
                        --------------  --------------- 
 Total                      18,216,214           19.11% 
----------------------  --------------  --------------- 
 
 

*Entities in which Nicola Foulston has a beneficial interest

 
 Total Issued Share Capital       95,331,236 
 

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 (F inancial Communications       Tel: +44 (0)7540 
  )                                            106366 
  Robin Tozer/Max Richardson                   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.

Chief Executive's Statement

Overview

The Group continues to evolve into a broad, high-quality professional services group with a litigation finance business leveraging the Group's legal expertise and building a diverse revenue base that removes dependence on any one business or fee generator.

The integration of Memery Crystal is almost complete. With this we have successfully delivered on a key part of the Group's strategy which is to acquire high-value, strategically additive assets and improve their performance. The combination of Memery Crystal with the Group's pioneering law firm Rosenblatt means we now have one of London's premier mid-tier law firms. Building on both the Rosenblatt and Memery Crystal brands, our legal services businesses provide quality advice to entrepreneurs and high-net-worth individuals.

The strategy of the Group is clear. We want to leverage our core professional services businesses, which account for 90% of our revenue and profits and capitalise on those areas that offer the highest returns for shareholders. Furthermore, we use the expertise within the Group to maximise the potential returns by selectively investing in contingent asset classes such as litigation. We generate revenue through the sale of participation rights in these assets, which also reduces the Group's risk.

Overall, the Group has performed well despite the macro-economic challenges led by both of our professional services businesses, which have recorded continuing revenue growth. The acquisition of Memery Crystal has added more revenue diversification across the fee earners, deeper profitability across the business, which will grow as the integration improves our pricing structures, and operating efficiencies through the combination of business support functions.

As a result of the solid performance across the Group, our revenue including gains on litigation assets for the period grew 44.8% to GBP26.6 million (2021: GBP18.3 million) with a gross margin of 40.2%.

Our sell-side M&A advisory boutique, Convex Capital, performed well in the first six months, completing five deals and GBP4.2 million of revenue. Importantly, momentum in deal flow remains strong in the current macro-economic environment, and our pipeline continues to grow.

We continue to invest in litigation assets, with 13 live deals across Rosenblatt and LionFish. LionFish has invested in 12 deals since its inception in May 2020 with one completed. For the six months ended 30 June 2022, the Group has delivered GBP2.5 million in participation rights sales (2021: GBP2.4 million). There were gains on litigation assets of GBP1.7 million (2021: GBP1.5 million).

Group EBITDA was up 31.8% to GBP6.8 million (2021: GBP5.2 million) at a margin of 25.6% (2021: 28.1%). The year-on-year decline is due to a larger percentage of our business now skewed toward legal services as a result of the Memery Crystal acquisition, which in its nature is lower margin. As previously disclosed, we are targeting an EBITDA margin of 35% or more, and remain on-track to achieve a higher net margin by the year-end. The Group's profit before tax was GBP4.4 million (2021: GBP3.9 million) and profit after tax was GBP3.5 million (2021: GBP3.1 million).

Our net debt position as at 30 June 2022 was GBP17.3 million (2021: GBP9.8 million), in line with management expectations. This reflects the investment in Memery Crystal and the GBP10.0 million term loan to fund the acquisition, which will be paid down over five years. We have already paid back GBP2.0 million. In addition, the Group has an additional GBP15.0 million revolving credit facility. We have drawn GBP14.0 million of the revolving credit facility as the Group's working capital requirements have doubled since the acquisition of Memery Crystal. There is further capacity to support the Group's growth. The Group has continued to trade comfortably within its debt covenants.

RBG Legal Services Limited ("RBGLS")

Following the completion of the acquisition of Memery Crystal in May 2021, the Group has almost concluded the integration of its two law firms, Rosenblatt and Memery Crystal. The new legal services corporate entity, RBG Legal Services Limited, will enable the Group to realise the synergies of the transaction fully.

The two brands - Rosenblatt and Memery Crystal - are aligned to contentious and non-contentious services to reflect their brand position within the market. We are building one of London's premier mid-tier law firms providing quality advice to entrepreneurs and high net worth individuals. As at 30 June 2022, the combined businesses had 182 people, including 126 fee earners, with particular strength in Dispute Resolution, Corporate and Real Estate.

The combined businesses are winning a broad range of new instructions, including corporate transactions, employment advisory work and financial restructuring mandates. The significantly enhanced scale has enabled us to win these mandates as well as improve the opportunity pipeline.

Due to the strong demand for legal services, revenue (and gains on the sale of litigation assets) were up 74.2% to GBP22.3 million (2021: GBP12.8 million). The consolidated business has helped diversify the legal services business. We have a balanced business across the key areas of Dispute Resolution, Corporate and Real Estate. The Dispute Resolution division is responsible for 31.6% (2021: 63.3%) of RBGLS's revenue, Real Estate represents 24.4% (2021: 17.2%) and Corporate is 44.0% (2021: 19.5%) of the combined business.

As well as the financial metrics, the other KPIs on which the Company is focused have performed well. The average revenue per fee earner was GBP363,000 (2021: GBP375,000). Our revenue per fee earner is in the top 20 of all UK law firms [2] . The small reduction reflects the diversification of the legal services business into more non-contentious areas of law, following the acquisition of Memery Crystal. This is less profitable work but more consistent, which provides a natural hedge to the Group's dispute resolution activities which, while more profitable, are more contingent.

In line with its strategy, the Group has increased the amount of contingent work it has taken on, enabled by the Group's bigger balance sheet. This is managed within the risk profile of the Group, where fee-paying work has to be prioritised. Contingent litigation cases need to pass the Group's stringent legal and commercial review process. Importantly, RBGLS can enter into more Alternative Billing Arrangements (ABAs), which generate incremental margins on a successful case outcome. No revenue is recognised by the Company until the result of the case has occurred. Such revenue is considered contingent.

For the six months ended 30 June 2022, RBGLS invested GBP1.7 million in external disbursements and counsel fees in relation to its litigation investments. The amount of contingent work carried out by the legal services business during the period was GBP1.2 million (2021: GBP1.9 million). As at 30 June 2022, RBGLS had invested a total of GBP9.3 million in external disbursements and counsel fees in 13 litigation investments, with a total contingent WIP of GBP12.5 million.

We have confirmed the appointment of a Chief Operating Officer for RBGLS, Jon Divers. He was initially appointed in February 2022, and has recently been confirmed in position, Jon has full day-to-day operational responsibility for the legal services division. He brings over 20 years of senior management experience at major companies including Mercedes Benz and Jungheinrich UK.

Convex Capital Limited ("Convex Capital")

Convex Capital, the specialist sell-side corporate finance advisory boutique based in Manchester, was acquired by the Group in September 2019. Convex Capital is entirely focused on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates or Private Equity. Convex Capital identifies and proactively targets businesses that it believes represent attractive acquisition opportunities. Convex has a motivated, dynamic team of 14 people, of which 13 are fee-earners.

The acquisition of Convex Capital was part of the Board's strategy focusing on other high-margin professional service areas. Convex Capital is an entrepreneurial, cash-generative business operating across the UK and Europe and will provide the Group with further funds for reinvestment into other high-margin areas.

As at 30 June 2022, Convex Capital had completed five deals and delivered GBP4.2 million of revenue. The strength of its pipeline and the agile nature of the business has enabled Convex Capital to maintain deals through the first half. As at 8 September 2022, Convex Capital had 24 active deals, of which three are in late stages of the completion process.

The business is actively building the target pipeline with a data-driven approach to generate deals rather than the traditional passive model where the target company waits to be approached and then appoints a corporate finance partner. In addition, Convex Capital's success is proving to be an active producer of new leads. Completed deals lead to recommendations (which still go through the active data driven qualification). It is the Board's expectation that the current macro-economic environment will support the on-going fundamentals that drive M&A.

LionFish Litigation Finance Limited ("LionFish")

Since our IPO in 2018, our strategy has been to develop our own litigation finance business. The Group initially invested only in Rosenblatt's own client matters, but on 1 May 2020 the Group launched LionFish. 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 now has two types of litigation investments - RBGLS's own client matters, and litigation matters run by third-party solicitors.

Both types of litigation investments not only have significant return potential, but they represent an opportunity to extract further value from the Group's legal and commercial expertise and diversify its sources of income.

Rosenblatt has a proven record of accomplishment in evaluating the legal merits of a litigation matter to optimise its profit. By leveraging this ability, alongside the origination capabilities of LionFish, and the Group's commercial acumen, the Group can identify third-party litigation cases and make investments with strong risk-adjusted returns.

This approach creates further revenue potential from sales in participation rights from litigation finance business beyond Rosenblatt's own client matters. For the 6 months ended 30 June 2022, LionFish has delivered GBP0.2 million in participation rights sales (2021: GBP0.8 million). There were gains on litigation assets of GBP0.1 million (2021: GBP0.5 million).

The Company believes it is important to reiterate the conservative approach we adopt towards the handling of, and accounting for, our litigation investments. We judge the fair value of investments to be equal to, or as close to, cost plus disposal proceeds, which means fair values do not materially exceed net cash disbursed, as well as having rules limiting the Group's cash and revenue exposure.

Based on the Group's strategy to target a return of two times the money invested, Lionfish is actively invested in 11 cases with a total capital commitment of GBP11.3 million of which GBP5.5 million has been deployed as at 30 June 2022 with GBP5.8 million committed over the life of the cases, which is circa three years. 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.

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.

M&A

We continue to assess M&A opportunities to build and diversify the business to create long term shareholder value, where financing allows. Our acquisition focus remains on high-margin, specialist businesses, which can also create opportunities for cross-referrals but only at the right value and with the right deal structure. The Group remains disciplined in its approach to M&A but continues to actively review potential opportunities according to its selective criteria.

Dividend

The Company's balance sheet remains solid, and the Board is committed to a progressive dividend policy. In line with that policy, the Board normally expects to pay up to 60 per cent of distributable retained earnings from the core business in any financial year by way of dividend, subject to cash requirements.

An interim dividend of 2 pence per share in respect of the six months to 30 June 2022 will be paid on 30 November 2022. The dividend record date is 23 September 2022, and the shares will be marked ex-dividend on 22 September 2022. The total dividend relating to the year ending 31 December 2021 was 5 pence per share.

Change of Auditor

Following a competitive tender process, the Group has appointed Moore Kingston Smith LLP ("MKS") as its new external auditor. MKS will conduct the audit of the Group's financial statements for the financial year ended 31 December 2022. Any proposal to re-appoint MKS in respect of the financial year beginning 1 January 2023 will be subject to shareholder approval at the next AGM.

BDO LLP has resigned by notice to the Group under section 516 of the Companies Act 2006 and has confirmed that there are no matters connected with their resignation that they consider need to be brought to the attention of the members or creditors of the Group for the purposes of section 519 of the Companies Act 2006.

Outlook

The Group has delivered another solid performance over the first half of the year which is reflected in improved revenue and profit growth. With consistent demand for all the Group's services, we remain on track to meet our expectations for the full year the Group's revenues and EBITDA have historically been second half weighted. While acknowledging that economic conditions continue to be volatile, we look forward to the coming months with optimism about the long-term prospects for the Group.

Nicola Foulston

Group Chief Executive Officer

12 September 2022

Chief Financial Officer's Review

Financial Review

During the first half of 2022 we have continued to build on our strong track record of delivering a profitable business. We are growing our revenues and EBITDA from diverse sources, de-risking each individual fee earner. The Group is well positioned to manage the uncertain economic environment through a strategy of business and services diversification, carefully selected acquisitions that are well managed and delivering increasing profits.

Key Performance Indicators (KPIs)

-- Group revenue (including gains from litigation assets): GBP26.6 million (2021: GBP18.3 million)

   --      EBITDA: GBP6.8 million, representing 25.6% of revenue (2021: GBP5.2 million, 28.1%) 

-- Profit before tax: GBP4.4 million, representing 16.4% of revenue (2021: GBP3.9 million, 21.5% of revenue)

-- Net debt of GBP17.3 million (2021: net debt of GBP9.8 million) reflecting the GBP10.0 million acquisition term facility, of which GBP2.0 million has been repaid. The Group also has a GBP15 million revolving credit facility, GBP1 million of which is available to be drawn down.

   --      Total lock up: 120 days (of which, debtor days were 52) (2021: 102 days, debtor days 46). 
   --      RBG Legal Services revenue per fee earner: GBP363,000 (2021: GBP375,000) 

-- RBGLS Utilisation/Realisation for the 6 months to June 2022 was 75%/88% (2021: Rosenblatt 86%/93% and Memery Crystal 102%/84%)

Revenue and Gains on Litigation Assets

Reported Group revenue and gains on litigation assets for the period is GBP26.6 million compared to GBP18.3 million in 2021, representing a 44.8% increase.

Staff costs

Total staff costs for the first half of 2022 were GBP15.9 million (2021: GBP10.6 million), which includes GBP2.1m for Convex (GBP0.7m in relation to the bonus scheme on completed deals), GBP0.3 million for LionFish and GBP12.3m for RBGLS. The average number of employees was 216 (2021: 121).

Overhead costs

During the half year to 30 June 2022, the Group incurred overheads of GBP19.8 million (before depreciation and amortisation) (2021: GBP13.2 million). Staff costs were GBP15.9 million (2021: GBP10.6 million), of which contractors' costs were GBP1.7 million (2021: GBP1.4 million).

Other operating costs were GBP3.9 million (2021: GBP2.6 million, of which the cost of the acquisition represented GBP0.5 million, and incremental Memery Crystal operating costs were GBP0.5 million).

EBITDA

EBITDA for the half year to 30 June 2022 was GBP6.8 million representing 25.6% of revenue including gains from litigation assets (2021: GBP5.2 million, 28.1%).

Profit Before Tax

The profit before tax for the period was GBP4.4 million representing 16.4% of revenue including gains from litigation assets (2021: GBP3.9 million, 21.5%).

Earnings Per Share (EPS)

The weighted average number of shares in 2021 was 95.3 million which gives a basic earnings per share (Basic EPS) for the period of 3.62p (2021: 3.47p).

Balance Sheet

 
                                               2022        2021 
                                               GBPm        GBPm 
                                                       restated 
 Goodwill, intangible and tangible assets      89.0        84.1 
                                            -------  ---------- 
 Current Assets                                17.5        17.1 
                                            -------  ---------- 
 Current Liabilities                         (11.7)       (8.1) 
                                            -------  ---------- 
                                               94.8        93.1 
                                            -------  ---------- 
 Net debt                                    (17.3)       (9.8) 
                                            -------  ---------- 
 Non-Current Liabilities                     (15.6)      (17.6) 
                                            -------  ---------- 
 
 Deferred consideration                           -       (7.2) 
                                            -------  ---------- 
 Net assets                                    61.9        58.5 
                                            -------  ---------- 
 

The Group's net assets as at 30 June 2022 increased by GBP3.4 million on the prior year.

Goodwill, Tangible and Intangible Assets

Included within tangible assets is GBP15.4 million which relates to IFRS 16 right of use assets for the Group's leases. Within total intangible assets of GBP55.4 million, GBP51.9 million relates to goodwill, GBP3.0 million relates to brand and GBP0.2 million relates to customer contracts. The Company has considered the amounts at which goodwill and intangible assets are stated on the basis of forecast future cash flows and have concluded that these assets have not been materially impaired.

Working Capital

Management of lock up has continued to be a key focus of the Group over the period. Convex and LionFish are invoiced on a cash basis, but our legal services business lock up days is a measure of the length of time it takes to convert work done into cash. It is calculated as the combined debtor and WIP days for the Group. This is a key focus for management and the Board as it drives the cash generation necessary to support the growth strategy of the Group. Lock up days at 30 June 2022 were 120 compared to 102 for the previous year, with debtor days being 51 (2021: 46) with the increase driven by the mix of the business following the acquisition of Memery Crystal.

Net Debt

We have a revolving credit facility of GBP15 million and an acquisition term loan of GBP10 million repayable over 5 years. Our net debt position is GBP17.3 million at the end of the period (2021: GBP9.8 million), includes GBP8 million of the term loan used to acquire Memery Crystal.

Cash Conversion

 
                                          2022    2021 
                                          GBPm    GBPm 
 Cash flows from operating activities      7.6     5.2 
                                        ------  ------ 
 Movements in working capital              1.1   (1.3) 
                                        ------  ------ 
 Increase in litigation assets           (4.9)   (1.4) 
                                        ------  ------ 
 Net cash generated from operations        3.8     2.5 
                                        ------  ------ 
 Interest                                (0.6)   (0.2) 
                                        ------  ------ 
 Capital expenditure                     (0.1)   (0.1) 
                                        ------  ------ 
 Free cash flow                            3.1     2.2 
                                        ------  ------ 
 Underlying profit after tax               3.5     3.1 
                                        ------  ------ 
 Cash conversion                           90%     71% 
                                        ------  ------ 
 

The cash conversion percentage measures the Group's conversion of its underlying profit after tax into free cash flows. Movements in working capital have been adjusted for deferred consideration payments made to Memery Crystal in the period. Net cash generated from operations includes GBP4.9 million (2021: GBP1.4 million) of net litigation investments. Cash conversion of 90% (2021: 71%) for the half year shows an increase from previous periods as a result of the stronger six-month trading period. It is a further focus of the business to drive to our target of 75 %, which has been exceeded by our strong focus on cash conversion.

Net Debt / Net Cash and cash equivalents

Net debt at the end of the period was GBP17.3 million (2021: GBP9.8 million net debt). The net decrease in cash and cash equivalents of GBP5.4 million for the period included GBP3.2 million of inflows generated from operating activities (net of GBP4.9 million of further investments in litigation assets). Investing activities gave rise to an outflow of GBP2.4 million, of which GBP2.2 million related to the deferred consideration payment made in relation to the acquisition of Memery Crystal. Outflows from financing activities of GBP0.7 million is predominantly made up of GBP3.0 million net proceeds of revolving credit facility less GBP2.8 million in dividends.

Summary

We are pleased with the profitability and performance of the Group during the first half of the year. The business has responded well to the challenges of the uncertain economy. However, it is important to acknowledge the continued impact and it will be a significant challenge moving forward.

Robert Parker

Chief Financial Officer

12 September 2022

Unaudited consolidated statement of comprehensive income

For the period ended 30 June 2022

 
                                                    Unaudited      Unaudited        Audited 
                                          Note      1 January      1 January      1 January 
                                                           to             to             to 
                                                      30 June        30 June    31 December 
                                                         2022           2021           2021 
                                                          GBP            GBP            GBP 
 
 Revenue                                     4     24,890,833     16,852,571     41,985,338 
 
 Gains on litigation assets                  4      1,678,569      1,494,425      5,207,524 
 
 Personnel costs                             5   (15,893,713)   (10,628,767)   (27,353,777) 
 Depreciation and amortisation expense            (1,810,406)      (975,334)    (2,940,078) 
 Other expenses                                   (3,884,264)    (2,565,144)    (6,915,433) 
 
 
 Profit from operations                             4,981,019      4,177,751      9,983,574 
 
 EBITDA                                             6,791,425      5,153,085     12,923,652 
 Non-underlying items 
 Cost of acquiring subsidiary                               -        524,905        863,435 
 Adjusted EBITDA                                    6,791,425      5,677,990     13,787,087 
---------------------------------------  -----  -------------  -------------  ------------- 
 
 Finance expense                                    (619,598)      (249,259)      (801,659) 
 Finance income                                         8,666         16,178         22,676 
 Share of post-tax profits of equity 
  accounted associates                                      -              -         21,643 
 Profit before tax                                  4,370,087      3,944,670      9,226,234 
 
 Tax expense                                        (911,274)      (891,448)    (1,968,821) 
 
 Profit from continuing operations                  3,458,813      3,053,222      7,257,413 
                                                -------------  -------------  ------------- 
 
 (Loss) on discontinued operations, 
  net of tax                                 6       (21,643)              -              - 
 
 Profit and total comprehensive 
  income                                            3,437,170      3,053,222      7,257,413 
                                                -------------  -------------  ------------- 
 
 Total profit and comprehensive 
  income attributable to: 
 Owners of the parent                               3,454,590      3,034,450      6,972,873 
 Non-controlling interest                            (17,420)         18,772        284,540 
 
                                                    3,437,170      3,053,222      7,257,413 
                                                -------------  -------------  ------------- 
 
 Earnings per share attributable 
  to the ordinary equity holders 
  of the parent 
 
 Profit 
 Basic and diluted (pence)                               3.62           3.47           7.63 
                                                -------------  -------------  ------------- 
 
 

Unaudited consolidated statement of financial position

As at 30 June 2022

 
 Company registered number: 11189598                  Unaudited     Unaudited       Audited 
                                             Note       30 June       30 June   31 December 
                                                           2022          2021          2021 
                                                                     restated 
                                                            GBP           GBP           GBP 
 
 Assets 
 Current assets 
 Trade and other receivables                         17,541,249    17,126,750    18,571,628 
 Cash and cash equivalents                            4,842,012    10,194,188     4,756,143 
                                                   ------------  ------------  ------------ 
                                                     22,383,261    27,320,938    23,327,771 
 
 Non-current assets 
 Property, plant and equipment                  9     2,451,377     2,831,745     2,589,390 
 Right-of-use assets                           10    15,369,432    17,035,042    15,913,008 
 Intangible assets                             11    55,440,526    56,128,413    55,859,230 
 Litigation assets                             12    15,696,605     7,981,999    11,571,052 
 Investments in associates                      6             -        80,000       101,643 
                                                   ------------  ------------  ------------ 
                                                     88,957,940    84,057,199    86,034,323 
 
 Total assets                                       111,341,201   111,378,137   109,362,094 
                                                   ============  ============  ============ 
 
 Liabilities 
 Current liabilities 
 Trade and other payables                             7,921,732    11,363,867    10,153,425 
 Leases                                        10     1,891,890     2,521,314     2,150,440 
 Current tax liabilities                              1,572,876     1,235,177     1,490,495 
 Provisions                                             340,061       142,621       314,291 
 Loans and borrowings                          13     2,182,163     2,000,000     2,129,592 
                                                   ------------  ------------  ------------ 
                                                     13,908,722    17,262,979    16,238,243 
 
 Non-current liabilities 
 Deferred tax liability                               1,078,987       803,223       851,662 
 Trade and other payables                               250,000     2,090,000       750,000 
 Leases                                        10    14,175,692    14,713,596    13,698,661 
 Loans and borrowings                          13    20,000,000    18,000,000    17,000,000 
                                                     35,504,679    35,606,819    32,300,323 
 
 Total liabilities                                   49,413,401    52,869,798    48,538,566 
                                                   ============  ============  ============ 
 
 NET ASSETS                                          61,927,800    58,508,339    60,823,528 
                                                   ============  ============  ============ 
 
 Issued capital and reserves attributable 
  to owners of the parent 
 Share capital                                          190,662       190,662       190,662 
 Share premium reserve                               49,232,606    49,232,606    49,232,606 
 Retained earnings                                   12,235,057     9,063,944    11,113,365 
                                                   ------------  ------------  ------------ 
                                                     61,658,325    58,487,212    60,536,633 
 
 Non-controlling interest                               269,475        21,127       286,895 
 
 TOTAL EQUITY                                        61,927,800    58,508,339    60,823,528 
                                                   ============  ============  ============ 
 
 

The interim statements were approved by the Board of Directors and authorised for issue on 12 September 2022.

Unaudited consolidated statement of cash flows

For the period ended 30 June 2022

 
                                                      Unaudited      Unaudited        Audited 
                                             Note       30 June        30 June    31 December 
                                                           2022           2021           2021 
                                                            GBP            GBP            GBP 
 
 Cash flows from operating activities 
 Profit for the year before tax                       4,370,087      3,944,670      9,226,234 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                                 9       286,851        199,196        525,606 
 Amortisation of right-of-use assets           10     1,104,851        589,380      1,781,058 
 Amortisation of intangible fixed 
  assets                                       11       418,704        186,757        633,414 
 Fair value movement of litigation 
  assets net of realisations                            811,381              -      (318,814) 
 Finance income                                         (8,666)       (16,178)       (22,676) 
 Finance expense                                        619,598        249,259        801,659 
 Share of post-tax profits of equity 
  accounted associates                                                       -       (21,643) 
                                                   ------------  -------------  ------------- 
                                                      7,602,806      5,153,084     12,604,838 
 
 Decrease/(increase) in trade and 
  other receivables                                   1,110,376      (872,208)    (2,220,725) 
 Increase/(decrease) in trade and 
  other payables                                         16,626      (442,862)      1,428,920 
 (Increase) in litigation assets               12   (4,936,934)    (1,412,889)    (4,683,128) 
 Increase in provisions                                  25,770         25,746         47,416 
 
 Cash generated from operations                       3,818,644      2,450,871      7,177,321 
 
 Tax paid                                             (601,566)      (276,765)    (1,077,855) 
 
 Net cash flows from operating activities             3,217,078      2,174,106      6,099,466 
                                                   ============  =============  ============= 
 
 Investing activities 
 Purchase of property, plant and 
  equipment                                     9     (148,838)       (46,125)      (130,179) 
 Acquisition of associate                                     -       (80,000)       (80,000) 
 Acquisition of subsidiary, net of 
  cash                                                        -   (12,000,000)   (12,000,000) 
 Payment of deferred consideration                  (2,248,319)              -    (4,518,585) 
 Dividend paid to non-controlling 
  interest                                                    -              -      (200,000) 
 Interest received                                        8,666         16,178         22,676 
 
 Net cash used in investing activities              (2,388,491)   (12,109,947)   (16,906,088) 
                                                   ============  =============  ============= 
 
 Financing activities 
 Dividends paid to holders of the 
  parent                                            (2,832,898)    (2,741,412)    (4,430,414) 
 Proceeds from loans and borrowings            13     4,000,000     21,000,000     20,000,000 
 Repayment of loans and borrowings             13   (1,000,000)   (11,000,000)   (11,000,000) 
 Repayments of lease liabilities               10     (342,794)      (401,485)    (1,856,938) 
 Interest paid on loans and borrowings                (303,126)      (127,173)      (279,497) 
 Interest paid on lease liabilities            10     (263,900)      (122,085)      (392,570) 
 
 Net cash from financing activities                   (742,718)      6,607,845      2,040,581 
                                                   ============  =============  ============= 
 
 Net increase/(decrease) in cash 
  and cash equivalents                                   85,869    (3,327,996)    (8,766,041) 
 Cash and cash equivalents at beginning 
  of year                                             4,756,143     13,522,184     13,522,184 
 
 Cash and cash equivalents at end 
  of year                                             4,842,012     10,194,188      4,756,143 
                                                   ============  =============  ============= 
 
 

Consolidated statement of changes in equity

For the period ended 30 June 2022

 
                                                      Share Capital         Share Premium          Retained 
                                                                                                   Earnings 
                                                                GBP                   GBP               GBP 
 
 Balance at 1 January 2021                                  171,184            37,565,129         9,070,906 
 
 Comprehensive profit for the period 
 Profit for the period                                            -                     -         3,034,450 
                                                -------------------      ----------------      ------------ 
 Total comprehensive profit for 
  the period                                                      -                     -         3,034,450 
 
 Contributions by and distributions 
  to owners 
 Dividends                                                        -                     -       (2,541,412) 
 Issue of share capital                                      19,478            11,667,477                 - 
 Grant of put option over shares 
  of associate                                                    -                     -         (500,000) 
 
 Total contributions by and distributions 
  to owners                                                  19,478            11,667,477       (3,041,412) 
 
 Balance at 30 June 2021 (unaudited 
  and restated)                                             190,662            49,232,606         9,063,944 
                                                ===================      ================      ============ 
 
                                                 Total attributable       Non-controlling             Total 
                                                          to equity              interest            equity 
                                                            holders 
                                                          of parent 
                                                                GBP                   GBP               GBP 
 
 Balance at 1 January 2021                               46,807,219               202,355        47,009,574 
 
 Comprehensive profit for the 
  period 
 Profit for the period                                    3,034,450                18,772         3,053,222 
                                                -------------------      ----------------      ------------ 
 Total comprehensive profit for 
  the period                                              3,034,450                18,772         3,053,222 
 
 Contributions by and distributions 
  to owners 
 Dividends                                              (2,541,412)             (200,000)       (2,741,412) 
 Issue of share capital                                  11,686,955                     -        11,686,955 
 Grant of put option over shares 
  of associate                                            (500,000)                     -         (500,000) 
 
 Total contributions by and distributions 
  to owners                                               8,645,543             (200,000)         8,445,543 
 
 Balance at 30 June 2021 (unaudited 
  and restated)                                          58,487,212                21,127        58,508,339 
                                                ===================      ================      ============ 
 
 
 

Consolidated statement of changes in equity

For the period ended 30 June 2022 (continued)

 
                                             Share Capital   Share Premium      Retained 
                                                                                Earnings 
                                                       GBP             GBP           GBP 
 
 Balance at 1 July 2021                            190,662      49,232,606     9,063,944 
 
 Comprehensive profit for the period 
 Profit for the period                                   -               -     3,938,423 
                                            --------------  --------------  ------------ 
 Total comprehensive profit for 
  the period                                             -               -     3,938,423 
 
 Contributions by and distributions 
  to owners 
 
 Dividends                                               -               -   (1,889,002) 
 
 Total contributions by and distributions 
  to owners                                              -               -   (1,889,002) 
 
 
 Balance at 31 December 2021 (audited)             190,662      49,232,606    11,113,365 
                                            ==============  ==============  ============ 
 
 
 
                                              Total attributable   Non-controlling         Total 
                                                       to equity          Interest        equity 
                                                      holders of 
                                                          parent 
                                                             GBP               GBP           GBP 
 
 Balance at 1 July 2021                               58,487,212            21,127    58,508,339 
 
 Comprehensive profit for the 
  period 
 Profit for the period                                 3,938,423           265,768     4,204,191 
                                             -------------------  ----------------  ------------ 
 Total comprehensive profit for 
  the period                                           3,938,423           265,768     4,204,191 
 
 Contributions by and distributions 
  to owners 
 
 Dividends                                           (1,889,002)                 -   (1,889,002) 
 
 Total contributions by and distributions 
  to owners                                          (1,889,002)                 -   (1,889,002) 
 
 
 Balance at 31 December 2021 
  (audited)                                           60,536,633           286,895    60,823,528 
                                             ===================  ================  ============ 
 
 

Consolidated statement of changes in equity

For the period ended 30 June 2022 (continued)

 
                                             Share Capital   Share Premium      Retained 
                                                                                Earnings 
                                                       GBP             GBP           GBP 
 
 Balance at 1 January 2022                         190,662      49,232,606    11,113,365 
 
 Comprehensive profit for the period 
 Profit for the period                                   -               -     3,454,590 
                                            --------------  --------------  ------------ 
 Total comprehensive profit for 
  the period                                             -               -     3,454,590 
 
 Contributions by and distributions 
  to owners 
 Dividends                                               -               -   (2,832,898) 
 Release grant of put option over 
  shares of associate                                    -               -       500,000 
 
 Total contributions by and distributions 
  to owners                                              -               -   (2,332,898) 
 
 Balance at 30 June 2022                           190,662      49,232,606    12,235,057 
                                            ==============  ==============  ============ 
 
 
 
                                              Total attributable   Non-controlling         Total 
                                                       to equity          interest        equity 
                                                         holders 
                                                       of parent 
                                                             GBP               GBP           GBP 
 
 Balance at 1 January 2022                            60,536,633           286,895    60,823,528 
 
 Comprehensive profit for the 
  period 
 Profit for the period                                 3,454,590          (17,420)     3,437,170 
                                             -------------------  ----------------  ------------ 
 Total comprehensive profit for 
  the period                                           3,454,590          (17,420)     3,437,170 
 
 Contributions by and distributions 
  to owners 
 Dividends                                           (2,832,898)                 -   (2,832,898) 
 Release grant of put option over 
  shares of associate                                    500,000                 -       500,000 
 
 Total contributions by and distributions 
  to owners                                          (2,332,898)                 -   (2,332,898) 
 
 Balance at 30 June 2022                              61,658,325           269,475    61,927,800 
                                             ===================  ================  ============ 
 
 

The attached notes form part of these financial statements.

Unaudited notes to the financial statements for the period ended 30 June 2022

 
 1.   Basis of preparation 
 

RBG Holdings plc is a public limited company, incorporated in the United Kingdom. The principal activity of the Group is the provision of legal and professional services, including management and financing of litigation projects.

Status of Interim Report

The Interim Report covers the six months ended 30 June 2022, with comparative figures for the six months ended 30 June 2021 and the year ended 31 December 2021 and was approved by the Board of Directors on 12 September 2022. The Interim Report is unaudited.

The interim condensed set of consolidated financial statements in the Interim Report are not statutory accounts as defined by Section 434 of the Companies Act 2006.

The statutory accounts for the year ended 31 December 2021 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Section 498 of the Companies Act 2006.

The principal accounting policies adopted in the preparation of the unaudited consolidated financial statements are set out in Note 2. The policies have been consistently applied to the periods presented, unless otherwise stated.

The unaudited consolidated financial statements of the Group have been prepared in accordance with IFRS as adopted by the UK and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in Note 3.

Going concern

The Group financial statements are prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements.

 
       Significant accounting policies 
  2. 
 

Revenue

Revenue comprises the fair value of consideration receivable in respect of services provided during the period, inclusive of recoverable expenses incurred but excluding value added tax.

Legal and Other Professional services revenues

Where fees are contractually able to be rendered by reference to time charged at agreed rates, the revenue is recognised over time, based on time worked charged at agreed rates, to the extent that it is considered recoverable.

Where revenue is subject to contingent fee arrangements, including where services are provided under Damages Based Agreements (DBAs), the Group estimates the amount of variable consideration to which it will be entitled and constrains the revenue recognised to the amount for which it is considered highly probable that there will be no significant reversal. Due to the nature of the work being performed, this typically means that contingent revenues are not recognised until such time as the outcome of the matter being worked on is certain.

Bills raised are payable on delivery and until paid form part of trade receivables. The Group has taken advantage of the practical exemption in IFRS 15 not to account for significant financing components where the Group expects the time difference between receiving consideration and the provision of the service to a client will be one year or less. Where revenue has not been billed at the balance sheet date, it is included as contract assets and forms part of trade and other receivables.

 
 
 

Other professional services revenues

Other professional services revenue is contingent on the completion of a deal and is recognised when the deal has completed. Bills raised are payable on deal completion and are generally paid at that time.

Basis of consolidation

Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements present the results of the company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Non-Controlling interests

The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests.

Where the Company has agreed a put option over the shares of a subsidiary held by a non-controlling interest, the liability for the estimated exercise value of the put option is recognised at fair value in the financial statements of the Company and is recognised at present value in the financial statements of the Group. Movements in the estimated liability after initial recognition are recognised in the income statement.

Goodwill

Goodwill represents the excess of the cost of a business combination over the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired.

Cost comprises the fair value of assets given, liabilities assumed, and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and in the case of contingent consideration classified as a financial liability, remeasured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid; the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group's accounting policy for each category is as follows:

Fair value through profit or loss

Litigation assets relate to the provision of funding to litigation matters in return for a participation share in the settlement of that case. Investments are initially measured at the sum invested and are subsequently held at fair value through the profit or loss.

When the Group disposes of a proportion of its participation share in the settlement of the case to a third party under an uninsured ("naked") contract, where the percentage of the litigation asset being disposed of and the percentage return remain proportionate irrespective of the final outcome of the litigation, the difference between the disposal proceeds and the cost of investment disposed gives rise to a profit on disposal which is recognised through the profit and loss when the sale is agreed. These sales are non-recourse and, if the case is successful, the relevant % of the settlement received is paid to the third party. For uninsured cases, the Group uses the value of third-party disposals to calculate the gross value of the proportion of the investment retained by the Group and deducts the expected cost of investment to be borne by the Group to give the fair value of the Group's investment. The proportion of each investment retained is calculated using the expected total return on the investment, the expected return payable to the onward investor and the expected total return retained by the Group.

For insured cases, when the Group disposes of a proportion of its participation share in the settlement of the case to a third party, where the third-party return is calculated as a fixed percentage daily rate irrespective of the settlement value of a successful litigation outcome, the derecognition requirements under IFRS 9 para 3.2.2 are not met and no sale or profit on disposal arise. The Group retains the full litigation asset and the proceeds of disposal under the third-party contract are included as litigation liabilities. The fair value of the litigation asset is calculated using the expected total return retained by the Group in the different possible outcomes factored by Management's expectation of the likelihood of each outcome.

Amortised cost

These assets arise principally from the provision of goods and services to customers (e.g., trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses.

During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in profit or loss. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the consolidated statement of comprehensive income (operating profit).

Impairment provisions for receivables from related parties and loans to related parties, including those from subsidiary companies, are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. This annual assessment considers forward-looking information on the general economic and specific market conditions together with a review of the operating performance and cash flow generation of the entity relative to that at initial recognition. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents includes cash in hand, deposits held at call with banks, and other short term highly liquid investments with original maturities of three months or less.

Financial liabilities

The Group classifies its financial liabilities depending on the purpose for which the liability was acquired.

Other financial liabilitie s

All the Group's financial liabilities are classified as other financial liabilities, which include the following items:

Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Externally acquired intangible assets

Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.

The significant intangibles recognised by the Group, their useful economic lives and the methods used for amortisation and to determine the cost of intangibles acquired in a business combination are as follows:

 
 Intangible            Useful economic   Remaining          Amortisation         Valuation method 
  asset                 life              useful economic    method 
                                          life 
 
 Brand                 20 years          16-19 years        Straight line        Estimated discounted 
                                                                                  cash flow 
 Customer contracts    1-2 years         1-2 years          In line with         Estimated discounted 
                                                             contract revenues    cash flow 
 Restrictive           2 years           1-2 years          Straight line        Cost 
  covenant extension 
 

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.

 
 3.   Critical accounting estimates and judgements 
 

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on actual experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

Judgements, estimates and assumptions

Estimated impairment of intangible assets including goodwill

Determining whether an intangible asset is impaired requires an estimation of the value in use of the cash generating units to which the intangible has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from each cash generating unit and determine a suitable discount rate. A difference in the estimated future cash flows or the use of a different discount rate may result in a different estimated impairment of intangible assets.

Revenue recognition

Where the group performs work that is chargeable based on hours worked at agreed rates, assessment must be made of the recoverability of the unbilled time at the period end. This is on a matter by matter basis, with reference to historic and post year-end recoveries. Different views on recoverability would give rise to a different value being determined for revenue and a different carrying value for unbilled revenue.

Where revenue is subject to contingent fee arrangements, the Group estimates the amount of variable consideration to which it will be entitled and constrains the revenue recognised to the amount for which it is considered highly probable that there will be no significant reversal. Due to the nature of the work being performed, this typically means that contingent revenues are not recognised until such time as the outcome of the matter being worked on is certain. Factors the Group considers when determining whether revenue should be constrained are whether:-

a) The amount of consideration receivable is highly susceptible to factors outside the Group's influence

   b)   The uncertainty is not expected to be resolved for a long time 
   c)   The Group has limited previous experience (or limited other evidence) with similar contracts 
   d)   The range of possible consideration amounts is broad with a large number of possible outcomes 

Different views being determined for the amount of revenue to be constrained in relation to each contingent fee arrangement may result in a different value being determined for revenue and also a different carrying value being determined for unbilled amounts for client work.

Where the group enters into Damages Based Agreements ("DBAs") that include both the provision of services and the provision of litigation finance, the Group must apportion the total expected settlement between that arising as conditional revenue for services and that arising as a return on participation. This requires estimation of the total amount of time cost and disbursements that will be incurred on a matter and the expected settlement value; the allocation of the DBA to revenue is made with reference to standard returns on contingent fee work. Different views will impact the level of unrecognised contingent revenue and also the recognised financial asset relating to the DBA participation.

Where non-contingent fees as well as contingent revenue are earned on DBAs, the group must make a judgement as to whether non-contingent amounts represent revenue or a reduction in funding, with reference to the terms of the agreement and timing and substance of time worked and payments made. Where non-contingent revenue arises, the Group must match it against the services to which it relates. This requires Management to estimate work done as a proportion of total expected work to which the fee relates. Different views could impact the level of non-contingent revenue recognised.

Impairment of trade receivables

Receivables are held at cost less provisions for impairment. Impairment provisions are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. A different assessment of the impairment provision with reference to the probability of the non-payment of trade debtors or the expected loss arising from default, may result in different values being determined.

Litigation assets and fair value

LionFish

For each of LionFish's uninsured ("naked") investments, a third party disposal has been made. To calculate the profit on disposal, the Group allocates the corresponding proportion of the total expected cost of the investment against the proportion of the investment sold. The total expected cost of each investment involves an assumption regarding the total expected drawdown on that investment, which may be less than the total value of funds committed. To calculate the proportion of each investment retained, the Group has estimated the expected total return on the investment and the expected return payable to the onward investor. As returns are dependent on the timing of the settlement, these estimates are driven by assumptions over the most likely timing of settlement. The sales prices of the part disposal are used to value the gross value of the proportion of the litigation asset retained by the Group and the estimated remaining capital to invest is deducted to give the fair value of the Group's investment. The estimates used in these calculations are based on semi-annual individual case by case reviews by Management.

The fair value of LionFish's insured investments is calculated using the expected total return retained by the Group in the different possible outcomes factored by Management's expectation of the likelihood of each outcome. As returns are dependent on the timing of the settlement, these estimates are driven by assumptions over the most likely timing of settlement. The total expected cost of each investment involves an assumption regarding the total expected drawdown on that investment, which may be less than the total value of funds committed. The expected total returns retained by the Group in the different possible outcomes are then factored by Management's expectation of the likelihood of each outcome. The estimates used in these calculations, are based on semi-annual individual case by case reviews by Management.

The recorded profits on disposal and carrying values are relatively insensitive to assumptions made, with the exception that matters for which capital invested is insured are sensitive to the estimated settlement date and the success likelihood factor applied. In general, the later the anticipated settlement date, the greater the carrying value of the investment. Management has exercised caution in its assessment of settlement dates. Management have used historic success rates on contingent contentious cases to factor the returns for the different possible outcomes.

Rosenblatt

Unlike LionFish's investments, the total return on Rosenblatt's litigation assets is a proportion of damages awarded, rather than being dependent on timing of settlement. As this figure is potentially large and uncertain, and has a strong impact on fair value calculations, where possible the Group avoids using it as an input to its fair value calculations.

Where a recent disposal of an interest in a damage-based agreement has been made, the sales price of the disposal has been used to value the gross value of the interest in damages retained by the Group. The sales price is adjusted downwards for the cost of the Group's ongoing funding of the matter, which is not borne by the onward investor. This involves an estimate of the likely amount and timing of disbursements over the course of the matter, the minimum being funds already disbursed at the balance sheet date. As management believes the sales price of disposals to represent the floor level, having been used to create a market and de-risk the original investment, the minimum level of disbursements has also been used in valuing the investment. If the present value of the maximum level of disbursements were applied against the value of damages based on disposal price, this would reduce the fair value of the investment to zero. Conversely, if a discounted cash flow method of valuation were used, including an estimate of the likely amount of damages on settlement, the value of the investment

would be significantly increased.

It is presumed that fair value and cost approximate to each other on initial recognition and where a damage-based agreement is at an early stage, such that the level of time worked is de minimis, the financial asset has been valued at cost, subject to assessment for overstatement.

Where there has been minimal activity on a damage-based agreement from period to period, the prior year valuation is taken as the initial indication of fair value, subject to assessment for overstatement.

Put options over shares held by non-controlling interest

The following key estimates and judgements have been used in determining the present value of put options over the shares held by the non-controlling interest in LionFish: -

a) It has been assumed that the option holder will exercise at the earliest possible opportunity, being 12 August 2022

b) The value at the date of exercise, which is calculated as a multiple of average profit over the preceding two years has been based on the actual profit after tax for the period ended 31 December 2020 and 31 December 2021

In determining the fair value of the put options, it has been assumed that fair value of the put shares in LionFish is equal to the fair value of the shares in the Company for which they would be exchanged, and that the fair value of the option is zero.

Claims and regulatory matters

The Group from time to time receives claims in respect of professional service matters. The Group defends such claims where appropriate but makes provision for the possible amounts considered likely to be payable, having regard to any relevant insurance cover held by the Group. A different assessment of the likely outcome of each case or of the possible cost involved may result in a different provision or cost.

The Company has been informed that HMRC has started an inquiry into the valuation of employee related securities issued by the Company in April 2018 prior to the IPO.

 
                           Segment information 
            4. 
 

The Group's reportable segments are strategic business groups that offer different products and services. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, which has been identified as the Board of Directors of RBG Holdings plc.

The following summary describes the operations of each reportable segment:

-- Legal services - Provision of legal advice, by RBGLS (trading under two brands, Rosenblatt and Memery Crystal)

   --      Litigation finance - Sale of litigation assets, by Rosenblatt and LionFish 

-- Other Professional services - Provision of sell-side M&A corporate finance services, by Convex

 
 Unaudited 6 months ended                   Legal   Litigation           Other           Total 
  30 June 2022                           services      finance    Professional 
                                                                      services 
                                              GBP          GBP             GBP             GBP 
 
 Segment revenue                       20,692,323            -       4,198,510      24,890,833 
                                      ===========  ===========  ==============  ============== 
 
 
 Segment gains on litigation 
  assets comprising: 
  Proceeds on disposal of 
   litigation assets                            -    2,489,950               -       2,489,950 
  Realisation of litigation 
   assets                                       -    (811,381)               -       (811,381) 
                                      -----------  -----------  --------------  -------------- 
 
 
  Profit on disposal of litigation 
   assets                                       -    1,678,569               -       1,678,569 
  Fair value movement on                        -            -               -               - 
   litigation assets 
                                      -----------  -----------  --------------  -------------- 
 
 
                                                -    1,678,569               -       1,678,569 
                                      ===========  ===========  ==============  ============== 
 
 
 Segment contribution                   9,778,777            -       2,033,580      11,812,357 
                                      ===========  ===========  ==============  ============== 
 
 
 Segment gains on litigation 
  assets                                        -    1,678,569               -       1,678,569 
                                      ===========  ===========  ==============  ============== 
 
 
 Costs not allocated to 
  segments 
 Personnel costs                                                                 (2,818,933) 
 Depreciation and amortisation                                                   (1,810,406) 
 Other operating expense                                                         (3,880,568) 
 Net financial expenses                                                            (610,932) 
 
 
 Group profit for the period 
  before tax                                                                       4,370,087 
                                                                                ============ 
 
 
 
 4.   Segment information (continued) 
 
 
 Unaudited 6 months ended                   Legal    Litigation           Other           Total 
  30 June 2021                           services       finance    Professional 
                                                                       services 
                                              GBP           GBP             GBP             GBP 
 
 Segment revenue                       11,833,512             -       5,019,059      16,852,571 
                                      ===========  ============  ==============  ============== 
 
 
 Segment gains on litigation 
  assets comprising: 
  Proceeds on disposal of 
   litigation assets                            -     2,386,000               -       2,386,000 
  Realisation of litigation 
   assets                                       -   (1,116,059)               -     (1,116,059) 
                                      -----------  ------------  --------------  -------------- 
 
 
  Profit on disposal of litigation 
   assets                                       -     1,269,941               -       1,269,941 
  Fair value movement on 
   litigation assets                            -       224,484               -         224,484 
                                      -----------  ------------  --------------  -------------- 
 
 
                                                -     1,494,425               -       1,494,425 
                                      ===========  ============  ==============  ============== 
 
 
 Segment contribution                   5,515,276             -       2,403,649       7,918,925 
                                      ===========  ============  ==============  ============== 
 
 
 Segment gains on litigation 
  assets                                        -     1,494,425               -       1,494,425 
                                      ===========  ============  ==============  ============== 
 
 
 Costs not allocated to 
  segments 
 Personnel costs                                                                  (1,701,228) 
 Depreciation and amortisation                                                      (975,334) 
 Other operating expense                                                          (2,559,037) 
 Net financial expenses                                                             (233,081) 
 
 
 Group profit for the period 
  before tax                                                                        3,994,670 
                                                                                 ============ 
 
 
 4.   Segment information (continued) 
 
 
 Audited 12 months ended                    Legal    Litigation           Other           Total 
  31 December 2021                       services       finance    Professional 
                                                                       services 
                                              GBP           GBP             GBP             GBP 
 
 Segment revenue                       32,570,661             -       9,414,677      41,985,338 
                                      ===========  ============  ==============  ============== 
 
 
 Segment gains on litigation 
  assets comprising: 
  Proceeds on disposal of 
   litigation assets                            -     4,888,711               -       4,888,711 
  Realisation of litigation 
   assets                                       -   (2,162,031)               -     (2,162,031) 
                                      -----------  ------------  --------------  -------------- 
 
 
  Profit on disposal of litigation 
   assets                                       -     2,726,680               -       2,726,680 
  Fair value movement on 
   litigation assets                            -     2,480,844               -       2,480,844 
                                      -----------  ------------  --------------  -------------- 
 
 
                                                -     5,207,524               -       5,207,524 
                                      ===========  ============  ==============  ============== 
 
 
 Segment contribution                  15,007,758             -       4,288,915      19,296,673 
                                      ===========  ============  ==============  ============== 
 
 
 Segment gains on litigation 
  assets                                        -     5,207,524               -       5,207,524 
                                      ===========  ============  ==============  ============== 
 
 
 Costs not allocated to 
  segments 
 Personnel costs                                                                  (4,668,749) 
 Depreciation and amortisation                                                    (2,940,078) 
 Other operating expense                                                          (6,911,796) 
 Net financial expenses                                                             (757,340) 
 
 
 Group profit for the period 
  before tax                                                                        9,226,234 
                                                                                 ============ 
 
 
 5.   Employees 
 
 
                                          Unaudited     Unaudited      Audited 
                                        6 mos ended   6 mos ended   Year ended 
                                        30 Jun 2022   30 Jun 2021       31 Dec 
                                                                          2021 
 Group                                          GBP           GBP          GBP 
 
 Staff costs (including directors) 
  consist of: 
 
 Wages and salaries                      12,174,082     7,951,210   20,868,566 
 Short-term non-monetary benefits           138,244        63,203      214,208 
 Cost of defined contribution scheme        365,071       185,761      673,817 
 Share-based payment expense                      -             -       72,000 
 Social security costs                    1,537,870       999,835    2,526,064 
                                       ------------  ------------  ----------- 
                                         14,215,267     9,200,009   24,354,655 
                                       ------------  ------------  ----------- 
 
 

Personnel costs stated in the consolidated statement of comprehensive income includes the costs of contractors of GBP1,678,446 (HY2021: GBP1,428,758, FY2021: GBP2,999,122).

The average number of employees (including directors) during the period was as follows:

 
                                   Unaudited     Unaudited       Audited 
                                 6 mos ended   6 mos ended    Year ended 
                                     30 June   30 Jun 2021   31 Dec 2021 
                                        2022 
                                      Number        Number        Number 
 
 Legal and professional staff            142            75           113 
 Administrative staff                     74            46            62 
                                ------------  ------------  ------------ 
                                         216           121           175 
                                ------------  ------------  ------------ 
 
 

Defined contribution pension schemes are operated on behalf of the employees of the Group. The assets of the schemes are held separately from those of the Group in independently administered funds. The pension charge represents contributions payable by the Group to the funds and amounted to GBP365,071 (HY2021: GBP185,761, FY2021: GBP673,817). Contributions amounting to GBP136,336 (HY2021: GBP106,619, FY2021: GBP127,296) were payable to the funds at period end and are included in trade and other payables.

 
 6.   Discontinued operations 
 

In June 2022, the Group sold its 40% interest in Adnitor Limited which is the only operation presented as a discontinued operation in 2022.

The post-tax loss on disposal of discontinued operations was determined as follows:

 
                                                            Unaudited 
                                                          6 mos ended 
                                                         30 June 2022 
                                                                  GBP 
 
 Cash consideration received                                   80,000 
                                                       -------------- 
 Total consideration received                                  80,000 
 
 Net assets disposed (other than cash): 
 Investment in associate                                      101,643 
 
 Loss on disposal of discontinued operation, net of 
  tax                                                        (21,643) 
 
 

On 1 February 2021, the Company agreed a call option over the shares of Adnitor Limited held by the majority shareholder. Under this agreement, the Company was required to purchase the remaining shares in Adnitor Limited by the fifth anniversary of the agreement, with consideration based on a multiple of Adnitor's profits, settled by the issue of ordinary shares in the Company. On the disposal of the Group's interest in Adnitor Limited this agreement was terminated and the present value of the option released through the Statement of Changes in Equity (2021: GBP500,000).

 
 7.   Earnings per share 
 
 
                                         Unaudited     Unaudited       Audited 
                                       6 mos ended   6 mos ended    Year ended 
                                           30 June       30 June   31 Dec 2021 
                                              2022          2021 
 Numerator                                     GBP           GBP           GBP 
 
 Profit for the period and earnings 
  used in basic and diluted EPS          3,454,590     3,034,450     6,972,873 
 
 Non-Underlying items 
 Costs of acquiring subsidiary                   -       524,905       863,435 
 Less: tax effect of above items                 -             -      (69,242) 
 
 Profit for the period adjusted for 
  non-underlying items                   3,454,590     3,559,355     7,767,066 
                                      ------------  ------------  ------------ 
 
 
 Denominator                                Number        Number        Number 
 
 Weighted average number of shares 
  used in basic and diluted EPS         95,331,236    87,421,556    91,408,901 
                                      ------------  ------------  ------------ 
 
 

Earnings per share is calculated as follows:

 
                                               Unaudited     Unaudited   Audited 
                                             6 mos ended   6 mos ended      2021 
                                                 30 June       30 June 
                                                    2022          2021 
                                                   Pence         Pence     Pence 
 
 Basic and diluted earnings per ordinary 
  share                                             3.62          3.47      7.63 
 
 Basic and diluted earnings per ordinary 
  share adjusted for non-underlying items           3.62          4.07      8.50 
 

Clawback arrangements over certain shares of Cascades Ltd would have an anti-dilutive effect on earnings per share and therefore no impact on diluted earnings per share.

 
 8.   Dividends 
 

On 22 February 2022, an interim dividend of 3 pence per share was paid in respect of the 2021 financial year.

 
 9.   Property, plant and equipment 
 
 
 Group                           Leasehold        Fixtures     Computer       Total 
                              improvements    and fittings    equipment 
                                       GBP             GBP          GBP         GBP 
 Cost 
 
 At 1 January 2022               2,710,279         251,294      791,516   3,753,089 
 Additions                           7,471          85,160       56,207     148,838 
                            --------------  --------------  -----------  ---------- 
 At 30 June 2022                 2,717,750         336,454      847,723   3,901,927 
 
 
 Accumulated Depreciation 
  and Impairment 
 
 At 1 January 2022                 487,148         116,989      559,562   1,163,699 
 Charge for the period             143,113          47,441       96,297     286,851 
                            --------------  --------------  -----------  ---------- 
 At 30 June 2022                   630,261         164,430      655,859   1,450,550 
 
 
 Net book value 
 
 At 1 January 2022               2,223,131         134,305      231,954   2,589,390 
 At 30 June 2022                 2,087,489         172,024      191,864   2,451,377 
                            --------------  --------------  -----------  ---------- 
 
 

Under debentures signed and registered on 19 April 2021, HSBC UK Bank plc have fixed and floating charges over the property, plant and equipment of the Group.

 
 10.   Leases 
 

The Group leases its business premises in the United Kingdom. The lease contracts either provide for annual increases in the periodic rent payments linked to inflation or for payments to be reset periodically to market rental rates.

Right-of-Use Assets

 
                                         Land and         Total 
                                        buildings 
                                              GBP           GBP 
 
 At 1 January 2022                     15,913,008    15,913,008 
 Amortisation                         (1,104,851)   (1,104,851) 
 Variable lease payment adjustment        561,275       561,275 
                                     ------------  ------------ 
 At 30 June 2022                       15,369,432    15,369,432 
 
 

Lease liabilities

 
                                        Land and        Total 
                                       buildings 
                                             GBP          GBP 
 
 At 1 January 2022                    15,849,101   15,849,101 
 Interest expense                        263,900      263,900 
 Variable lease payment adjustment       561,275      561,275 
 Lease payments                        (606,694)    (606,694) 
                                     -----------  ----------- 
 At 30 June 2022                      16,067,582   16,067,582 
 
 

At 30 June 2022, lease liabilities were falling due as follows:

 
 Group                Up to 3     Between     Between     Between      Over 5        Total 
                       months    3 and 12     1 and 2     2 and 5       years 
                                   months       years       years 
                          GBP         GBP         GBP         GBP         GBP          GBP 
 Lease liabilities    340,385   1,551,505   4,411,902   7,546,964   2,216,826   16,067,582 
 
 
 11.   Intangible assets 
 
 
 
 Group                         Goodwill     Customer       Brand       Other        Total 
                                           Contracts 
                                    GBP          GBP         GBP         GBP          GBP 
 Cost 
 
 At 1 January 2022           51,862,168    1,706,578   3,360,474   1,000,000   57,929,220 
 
 At 30 June 2022             51,862,168    1,706,578   3,360,474   1,000,000   57,929,220 
 
 
 Accumulated amortisation 
  and impairment 
 
 At 1 January 2022                    -    1,466,599     270,058     333,333    2,069,990 
 Amortisation charge                  -       84,696      84,008     250,000      418,704 
                            -----------  -----------  ----------  ----------  ----------- 
 At 30 June 2022                      -    1,551,295     354,066     583,333    2,488,694 
 
 
 Net book value 
 
 At 1 January 2022           51,862,168      239,979   3,090,416     666,667   55,859,230 
                            -----------  -----------  ----------  ----------  ----------- 
 At 30 June 2022             51,862,168      155,283   3,006,408     416,667   55,440,526 
                            -----------  -----------  ----------  ----------  ----------- 
 
 

Under debentures signed and registered on 19 April 2021, HSBC UK Bank plc have fixed and floating charges over the intangible assets of the Group.

 
 12.   Litigation assets 
 

The table below provides analysis of the movements in the Level 3 financial assets.

 
                                 Unaudited       Unaudited        Audited 
                              30 June 2022    30 June 2021    31 December 
                                                                     2021 
                                   Level 3         Level 3        Level 3 
                                                  restated 
                                       GBP             GBP            GBP 
 
 At 1 January                   11,571,052       6,569,110      6,569,110 
 Additions                       4,936,934       2,304,464      4,683,128 
 Realisations                    (811,381)     (1,116,059)    (2,162,031) 
 Fair value movement                     -         224,484      2,480,845 
                            --------------  --------------  ------------- 
 At 30 June / 31 December       15,696,605       7,981,999     11,571,052 
                            --------------  --------------  ------------- 
 
 

Sensitivity of Level 3 valuations

Following investment, the Group engages in a semi-annual review of each investment's fair value. At 30 June 2022, should the value of investments have been 10% higher or lower than provided for in the Group's fair value estimation, while all other variables remained constant, the Group's income and net assets would have increased and decreased respectively by GBP1,569,661 (HY2021 restated: GBP798,200, FY2021: GBP1,157,105).

 
 13.   Loans and borrowings 
 

The book value and fair value of loans and borrowings which all denominated in sterling are as follows:

 
                   Unaudited    Unaudited    Unaudited    Unaudited      Audited      Audited 
                  Book value   Fair value   Book value   Fair value   Book value   Fair value 
                      30 Jun       30 Jun       30 Jun       30 Jun       31 Dec       31 Dec 
                          22         2022         2021         2021         2021         2021 
                         GBP          GBP          GBP          GBP          GBP          GBP 
 
 Non-current 
 Bank loans 
 Secured          20,000,000   20,000,000   18,000,000   18,000,000   17,000,000   17,000,000 
 
 Current 
 Bank loans 
 Secured           2,182,163    2,182,163    2,000,000    2,000,000    2,129,592    2,129,592 
 
 
 At 30 June/31 
  December        22,182,163   22,182,163   20,000,000   20,000,000   19,129,592   19,129,592 
 
 

The rate at which Sterling denominated loans and borrowings are payable is 2.65% above SONIA (2021: 2.40% above SONIA).

The bank loans are secured by fixed and floating charges over the assets of the Group. The Group has GBP1 million undrawn committed borrowing facilities available at 30 June 2022 (HY2021: GBP5 million, FY2021: GBP5 million).

[1] Figures for 2021 include one month of contribution from Memery Crystal following the completion of the acquisition at the end of May 2021.

[2] Revenue per fee earner data taken from The Lawyer UK 200: Top 100 latest data. UK firms are ranked 1-100 by firm-wide revenue (year end 2020/21)

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