RBG continuing to trade in line with expectations

Professional services company RBG said on Friday that it was continuing to trade in line with market expectations after its first half.

The AIM-traded firm said that as a result, it intended to pay an interim dividend of 2p per share for the six months ended 30 June on 27 August, to shareholders on the register as at 30 July.

It said its legal services division, which included Rosenblatt (RBL) and Memery Crystal, had performed well across all practice areas, particularly those focussed on contentious law such as dispute resolution, and its corporate division which was focused on commercial transactions.

The acquisition of Memery Crystal was completed on 28 May, and its integration into the legal services division was said to be progressing “well”.

“While RBL and Memery Crystal retain their own brand identities, the two firms are highly complementary and are in the process of being combined into one legal services business,” the RBG board said in its statement.

“Opportunities have been identified to leverage both firms' skills, resources, and reputation to enhance the group's offering to its combined client base.

“Looking ahead, the group plans to integrate all support functions, including technology platforms, and implement other changes to deliver further synergies while retaining the client-facing brands of 'Rosenblatt' for contentious legal services and 'Memery Crystal' for non-contentious legal services.”

Looking at its litigation finance division, the group said it had two types of litigation assets being its own client matters, and litigation matters run by third-party solicitors funded by LionFish Litigation Finance, with both offering opportunities for “high potential” returns, according to the board.

The current litigation assets included three large cases, project named ‘Neptune’, ‘Shango’, and ‘Mercury’.

In the case of project Neptune, the Court of Appeal recently found that because there was a 19-month delay in the judge providing a judgment, the judgment was not safe.

RBG confirmed that a full re-trial had been ordered, with the date not yet set.

LionFish, meanwhile, was actively invested in 10 cases with a total cash investment of £3.2m across the cases, and a total capital commitment of £8m if all cases went to trial.

In April, LionFish recorded its first successful litigation investment since launch.

While the return was “not material” to the group's forecast financial results, the successful investment provided a gross 2x money return over and above invested cash.

Additionally, the directors said the result confirmed that LionFish could deliver “significant” returns from its portfolio of assets.

Finally, looking at the company’s specialist sell-side corporate finance boutique, Convex Capital, the board said that after a “challenging” 2020 in which deals were postponed or delayed due to Covid-19, the business was working to pivot its sector focus to rebuild its transaction pipeline.

As a result, since 1 January Convex had completed eight deals generating revenue of £5m, and had a “strong pipeline” of 25 deals, with several currently at various stages of completion.

“The group has continued its strong performance in the first six months, after an excellent 2020,” said group chief executive officer Nicola Foulston.

“We have seen demand for all legal services continue as expected, including a significant increase in corporate and commercial transactions, such as initial public offerings and real estate deals, as we emerge from the pandemic.

“I am pleased with the progress in terms of integrating Memery Crystal into the group.”

Foulston said the company was identifying “many opportunities” for both law firms to work together, and enhance its client offering.

“We continue to build a portfolio of litigation investments comprising both RBG's own matters and third-party matters through LionFish, which offer the potential for high returns for our shareholders.

“Our mergers and acquisitions business, Convex Capital, has sustained its strong start to the year converting its pipeline.

“We are confident about the rest of the year as market conditions continue to improve.”

RBG said it would release its financial results for the six months ended 30 June on 15 September.

At 1406 BST, shares in RBG Holdings were down 8.53% at 135.38p.