FRP Advisory reports robust first half

The AIM-traded firm attributed the growth to a combination of organic expansion and strategic acquisitions, notably the addition of APP and Wilson Field Group.

Underlying adjusted EBITDA saw substantial growth of 34% to £15.5m for the six months ended 31 October, while reported profit before tax rocketed 105% to £11.5m.

Adjusted profit before tax also showed a notable gain of 35% to £13.8m.

Reported basic earnings per share increased by 41% to 3.76p, and the adjusted total earnings per share recorded a rise of 25% to 4.2p.

The company's cash collection, including VAT, showed an 8% increase to £56.3m.

FRP's net cash position decreased 56% year-on-year to £11.7m.

The board hiked the first-half dividend by 6% to 1.8p per share and reported revenue per partner for the six months reached £0.7m, indicating a 17% increase.

It said the number of administration appointments more than doubled, reaching 169, reflecting an impressive 117% increase compared to last year.

The number of fee earners, including partners, increased by 15% to 484, and the number of colleagues, excluding consultants, grew by 16% to 622.

FRP's colleague utilisation rate improved by 3%, reaching 65%.

In the restructuring sector, the company reported that its market share in administration appointments grew to 20% by volume, including some group appointments, and was approximately 15% on an underlying basis.

In the FRP Corporate Finance division, including debt advisory services, the firm remained active in the mid-market, completing 25 transactions during the half-year, with a combined deal value of £537m and £209m of debt raised.

There were signs of increased activity in debt refinancing and restructuring-related mergers and acquisitions.

The forensic services division reported high activity across investigations and disputes.

In the financial advisory sector, the company actively engaged in various assignments, including option reviews and transaction due diligence, supported by its valuations and pensions advisory specialists.

Notably, the period saw FRP Advisory Group's seventh acquisition since its initial public offering in March 2020, with the acquisition of Sheffield-based Wilson Field Group in September for £4.8m.

Wilson Field provides restructuring advisory and debt advisory services to clients locally and nationwide.

Two of the firm's directors joined as partners, along with their team of 63.

On an annual basis, it was expected that Wilson Field's underlying incremental contribution to FRP would be revenue of £5.6m and adjusted EBITDA of £1.1m.

FRP Advisory Group also invested in its operational infrastructure, including the formal certification of the ISO/IEC 27001:2013 international standard in November, confirming that it had a system in place to manage risks related to the security of data it owned or handled.

Additionally, FRP launched a new leadership program for 100 colleagues nationwide and continued to invest in learning and development, including introducing a learning management system (LMS).

Notably, the firm exhibited a consistently high level of staff retention compared to the broader professional services industry, with voluntary attrition standing at 10% for the period.

Looking ahead, FRP Advisory Group said it was confident in its leading market positions and the increasing demand for its advisory services.

The restructuring team reported heightened activity levels, resulting in market share gains.

Trading to date was positive, with the board anticipating exceeding current consensus market expectations for the 2024 financial year.

If current activity levels persisted, the directors said they expected the company to achieve revenue of £123m and adjusted EBITDA of £32m for the year.

"Our strategy is to ensure our five service pillars and 28 locations are connected and work together to provide solutions that achieve the best possible outcomes, which supports our delivery of sustainable profitable growth," said chief executive officer Geoff Rowley.

"Our total first half revenue growth was 19%, of which organic revenue growth accounted for 16%, while underlying adjusted EBITDA grew by 34%."

Rowley said trading to date had been positive, with the board expecting to exceed current consensus market expectations for the 2024 financial year.

"FRP is well positioned in our core markets, to support corporates through their business cycle and the board is confident of continued progress."

At 1301 GMT, shares in FRP Advisory Group were up 5.47% at 135p.

Reporting by Josh White for Sharecast.com.