FRP Advisory to beat expectations on revenue, earnings
By Josh White
Date: Tuesday 17 May 2022
(Sharecast News) - FRP Advisory Group described "another strong performance" in a full-year update on Tuesday, with growth in both revenue and profit.
The AIM-traded business advisory firm said it expected to report revenue of £95.2m for the 12 months ended 30 April, up 21% year-on-year.
Adjusted EBITDA was set to rise 12% to £25.7m, with both revenue and earnings ahead of current market consensus.
The group said it benefited from "notable contributions" that were success-fee based, including several sizable corporate finance deals completed, and certain contingent fees within restructuring, where fee recognition only occurs on the achievement of asset realisation outcomes.
FRP said its balance sheet remained "strong", with an unaudited net cash balance as at 30 April of £18.1m, up from £16.4m year-on-year.
That consisted of gross cash of £24.9m, less a balance remaining on a term loan of £6.8m, with the group also holding an undrawn revolving credit facility of £10m with Barclays.
The group said it would have repaid all initial public offering liabilities due to partners in May, after a final payment of £1.3m.
Given the trading performance and strong balance sheet, the directors said they intended to propose a final dividend, in line with their stated dividend policy.
Looking ahead, FRP said following the lifting of government support measures and ongoing headwinds facing companies in the UK, it had seen an increase in the level of enquiries for restructuring services in recent months.
The UK merger and acquisition market remained "buoyant", the board said, despite economic and inflationary headwinds.
Banks, debt funds and private equity businesses remained well-financed, with "significant" capital to deploy.
Across its network of 26 locations with five connected specialist service pillars, FRP said it was "well-positioned" to help more clients and continue making progress.
"We have achieved another strong result by staying focused on doing the basics well and giving clients honest, clear and considered advice," said chief executive officer Geoff Rowley.
"The medium term outlook for our key markets remains positive.
"Our corporate finance team has a strong pipeline and are well positioned to continue helping clients realise their strategic ambitions."
Rowley said the restructuring team, meanwhile, was well-positioned to serve the expected increase in demand stemming from increasing economic challenges.
"However, uncertainties still remain over how long the available liquidity and government-backed loans can sustain troubled businesses or how proactive key creditors like HMRC and institutional lenders will be on addressing overdue debts.
"We plan to continue making progress in the next financial year and delivering on our strategy of sustainable profitable growth by ensuring our five service pillars work together to provide solutions that achieve the best possible outcomes."
FRP said it would report its audited results for the full year ended 30 April in late July.
At 1214 BST, shares in FRP Advisory Group were up 3.32% at 146.2p.
Reporting by Josh White at Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN