FRP
Advisory Group plc
("FRP" or
the "Group")
Half Year
Trading Update
FRP Advisory Group plc, a leading
national specialist business advisory firm, announces a
trading update for the half year ended 31 October 2024 ("H1
2025").
Strong first half
performance
The Group's performance was strong
during the first half, with continued growth in revenues and
profits, and further investment in the team.
The Group expects to report revenue
for H1 2025 of £77.6m, up 32% on the prior year (H1 2024: £58.7m),
and underlying adjusted EBITDA* of £22.3m, up 44% on the prior year
(H1 2024: £15.5m).
Revenue growth comprised 23% of
organic growth and 9% of inorganic, the latter defined as an
acquisition's first 12 months' contribution to the Group. During
the half, four acquisitions were completed across three service
pillars.
Restructuring
The first half began well with the
completion of a number of notable projects, including The Body
Shop.
The UK general election in July 2024
was followed by a three-month period of economic stagnation in the
UK, with uncertainty in advance of the new government's budget
delaying decision making. During this pre-budget period, there was
a spike in the number of solvent liquidations.
The increase in employers' National
Insurance Contributions announced in the recent budget is likely to
put further pressure on businesses with large workforces and lower
margins. The retail and hospitality sectors in particular, which
were already navigating post-Covid debt service and other
inflationary cost pressures, are expected to face additional
financial challenges.
Corporate Finance and Debt
Advisory
FRP Corporate Finance has continued
to invest in both external and internal talent. It expanded its
geographical footprint in the period with the acquisitions of
Lexington Corporate Finance (based in Cardiff) and Williams Ali
(based in Newcastle). Both businesses will trade as FRP Corporate
Finance.
Moving into H2 2025, the pipeline of
new opportunities remains solid, as uncertainty moderates and
sentiment stabilises following the budget. We continue to see good
levels of activity with signs of an increase in debt refinancing
and restructuring related M&A activity.
Early in the first half FRP also
acquired The Hilton-Baird Group, which sits within the Debt
Advisory Pillar. Based in Southampton it operates nationally and
provides commercial finance brokerage, outsourced risk and
receivables audit, as well as credit management and commercial debt
collection services; a key client group is Asset-Based Lenders
(ABLs). Trading is as expected.
Forensic Services
The Forensic Services market has
been relatively buoyant in the period, especially in litigation and
contentious insolvency related matters. The Group has continued to
expand its service offering by bolstering the team, including with
the hire of a Forensic Services Partner in our new Belfast
office.
Financial Advisory
Anticipation of the new government's
budget drove an increase in activity in the transaction services
market, which FRP's Financial Advisory pillar was well-placed to
support. This principally resulted in an increase in buyside
Financial Due Diligence (FDD) mandates, business valuations and
pre-lending mandates.
Financial Advisory continues to
support cross-pillar initiatives and increase its national
coverage. The valuation team doubled following the Globalview
acquisition in October 2024 and FRP now offers a broader range of
valuation services to clients.
*Underlying adjusted EBITDA removes exceptional costs and
non-cash costs including share based payments relating to deemed
remuneration arising on acquisitions that is subject to continuing
employment and the Employee Incentive Plan established on IPO and
funded by partners, resulting in no dilution to existing
shareholders.
Balance sheet strength
The Group's balance sheet remains
strong with an unaudited net cash balance as at 31 October 2024 of
£13.3m** (31 October 2024: £11.7m). The Group also has an undrawn
RCF of £10 million and an accordion acquisition facility with
Barclays Bank.
**£22.2 gross cash less £8.9m of structured debt (31 October
2024: £15.7m less £4m), repayable over approximately three
years.
Continued investment in enhancing
the team
FRP's offices routinely collaborate,
deploying the right team of specialists for each assignment to
deliver optimum solutions.
To ensure capacity and expertise
aligns with demand, the Group has selectively expanded its
headcount during the half, with the total number of Colleagues
growing by 18% over H1 2025 (25% year-on-year) including acquired
colleagues.
Outlook
Trading since 1 May 2024 has been
positive, including a strong contribution from The Body Shop case
and the completion of a large Corporate Finance project. The
pipeline remains encouraging, and assuming current activity levels
continue, the Board remains confident of achieving full year
expectations.***
***The Company believes consensus market expectations for FY
2025 to be revenue of £146.7m and adjusted EBITDA of
£39.5m.
Geoff Rowley, Chief Executive Officer of FRP Advisory Group
plc, said:
"FRP has delivered another strong performance in the first
half of the year, reporting increased revenue and profits. In line
with our proven strategy, we continued to be acquisitive,
strengthening the Group with four acquisitions across three of our
service pillars. In doing so, we have enhanced our offering and are
even better positioned to provide optimum solutions for our
clients.
"I
am confident that we will make further progress in the remainder of
the year, as we support corporates through the entire business
cycle."
Notice of results
The Group expects to report its
unaudited results for the half year ended 31 October
2024 on 17 December 2024.
The information contained within
this announcement is deemed by the Group to constitute inside
information under the Market Abuse Regulation No.
596/2014.
Enquiries:
FRP
Advisory Group
plc
Geoff Rowley, CEO
Jeremy French, COO
Gavin Jones, CFO
Enquiries via MHP
Cavendish Capital Markets Limited (Nominated Adviser and Joint
Broker)
Katy Birkin/Stephen Keys/George
Lawson (Corporate Finance)
Tel: +44 (0) 207 220 0500
Investec Bank plc (Joint Broker)
Carlton Nelson/James Rudd (Corporate
Broking)
Tel: +44 (0) 207 597 4000
MHP
(Financial Public Relations)
Oliver Hughes
Eleni Menikou
Lexi Iles
Tel: +44 (0) 7701 308 818
FRP@mhpgroup.com
Notes to Editors
FRP is a leading national specialist
business advisory firm established in 2010. It offers a range of
advisory services to companies, lenders, investors and other
stakeholders, as well as individuals. These services
include:
· Restructuring
advisory: corporate financial advisory, formal insolvency
appointments, informal restructuring advisory, personal insolvency
and general advice to all stakeholders.
·
Corporate finance: mergers
& acquisitions (M&A), strategic advisory and valuations,
financial due diligence, capital raising, special situations
M&A and partial exits.
· Debt
advisory: raising and refinancing debt, debt amendments and
extensions, restructuring debt, asset based lending and corporate
and leveraged debt advisory.
· Forensic services:
forensic investigations, compliance and risk advisory, dispute
services and forensic technology.
· Financial advisory: transaction services including financial
due diligence, lender services, financial modelling, valuations,
pensions and company-side advisory services.