TIDMRBGP
RNS Number : 5217I
RBG Holdings PLC
05 December 2022
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 as retained as part of UK
law by virtue of the European Union (Withdrawal) Act 2018 (as
amended). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.
5 December 2022
RBG Holdings plc
("RBG" or the "Group")
Trading & Dividend Update
RBG Holdings plc (AIM: RBGP), the professional services group,
today publishes an update on current trading and outlook.
RBG's strategy has been to deliver revenues and profit from a
diversified portfolio of professional services businesses, reducing
overall volatility of earnings and the impact of any losses from
any one business. This strategy has served the Group successfully
since its admission to AIM in 2018 with the Group achieving
profitable top line growth each year.
Professional Services - RBG Legal Services Limited ("RBGLS") and
Convex Capital Limited ("Convex")
The Group's professional services businesses RBGLS which holds
the Company's two client-facing brands ('Rosenblatt', and 'Memery
Crystal)', and Convex have had a robust performance year-to-date,
despite the market headwinds.
As a result, RBGLS is on track to exceed the Board's
expectations for the full year, whilst Convex has some transactions
which are now expected to complete in Q1 2023, with deferment of
revenue into the new financial year. Together, the professional
services businesses will be marginally ahead of the Board's
expectations for the year.
LionFish Litigation Finance Limited ("LionFish")
The Group's litigation finance subsidiary, LionFish has recently
lost two of the cases that it has invested in and following a
review, the Board has now concluded that any further appeals on
these cases are no longer viable.
As a result, LionFish will now have a non-cash write-off of
GBP4.0m in 2022 and will, therefore, miss the Board's previous
expectations of GBP2.3m profit. The actual cash loss associated
with these cases amounts to GBP1.1m over the life of the
investment.
Committed funding on the on-going Lionfish cases is GBP3.3m over
the next two years.
The Board has been reviewing its strategy with respect to third
party litigation funding through LionFish with a view to reducing
the Group's ongoing exposure to the remaining committed funding.
The Group expects to make a further announcement after the
year-end.
Dividend
As a result of the strong performance in the professional
service businesses, the Group intends to announce as planned a
second interim dividend for the twelve months to 31 December 2022
in its full year trading statement in January 2023 in line with its
policy of distributing up to 60% of retained profits.
Balance Sheet
As highlighted above, losses arising from the unsuccessful
Litigation Finance cases have no further impact on the Group's cash
position and the Group's balance sheet remains in line with the
Board's expectations. Free cash flow generation at Group level has
remained positive and strong across 2022. The Group continues to
trade within its facility agreements and retains sufficient
headroom to execute on its strategy.
Outlook
RBGLS continues to trade robustly and Convex has a strong
pipeline of deals which remain in process. As a result of the case
losses in LionFish, the Group now expects adjusted EBITDA to be
materially behind current market consensus expectations for 2022
and in a range of between GBP11.0m-GBP12.0m. The Board is confident
in the medium and long-term outlook of the business.
Commenting Group CEO Nicola Foulston, said: "I am very
disappointed with the LionFish position. We are taking steps to
address the ongoing exposure to this subsidiary. We will also look
at the efficiency of the cost base so that in 2023 we continue to
deliver strong cash generation and good yield.
"I am pleased to see the robust trading of our professional
services business, which follows a strong 2021 financial year. We
are seeing the benefits of the integration of Memery Crystal and
Rosenblatt with improved operating efficiency driving higher
margins. While there is some disruption from difficult market
conditions, Convex continues to benefit from its model of deep deal
origination around the demands of buyers for good businesses.
"As we refocus the Group on Professional Services business, we
are excited at the potential to grow the businesses organically and
drive opportunities for cross-selling.
"We are confident in the medium to long-term outlook of the
business and are looking forward to the next 12 months with
optimism, despite the ongoing economic uncertainty."
Enquiries:
RBG Holdings plc Via SEC Newgate
Nicola Foulston, CEO
Singer Capital Markets (Nomad and Broker) Tel: +44 (0)20 7496
Rick Thompson / Alex Bond / James Fischer 3000
(Corporate Finance)
Tom Salvesen (Corporate Broking)
SEC Newgate (for media enquiries) Tel: +44 (0)7540
Robin Tozer 106366
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.
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.
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.
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