Frp Advisory Group Plc · LSE:FRP
Frp Advisory — FY2022 Earnings Presentation
35 slides from Frp Advisory's earnings presentation, 2022
Slide 1: Full Year Results FY 2022
Updated for PY headcount and Cashflow presentation. Aligned to the FY 2022 Annual Report & Accounts
Slide 2: Agenda
Presentation team Highlights and Strategy Market and Team growth Financials Outlook Q&A Appendices Investment case frpadvisory.com 2
Slide 3: Presentation team
Presentation team Geoff Rowley Chief Executive Officer > +44 (0)20 3005 4289 > geoff.rowley@frpadvisory.com -_— Gavin Jones Chief Financial Officer > 444 (0)1277 503 333 > gavin.jones@frpadvisory.com Jeremy French Chief Operating Officer > +444 (0)1277 503 333 > jeremy.french@frpadvisory.com frpadvi
Slide 4: Highlights and Strategy
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Slide 5: Our Strategy - unchanged from IPO
Our Strategy - unchanged from IPO Sustainable profitable growth, with a focus on organic growth and supplemented by selective acquisitions People & Give clear culture honest advice Staying focused on the basics Referral Working network capital discipline Infrastructure FRP frpadvisory.com 5
Slide 6: Financial highlights
frpadvisory.com 6 *Adjusted for share based payments, deemed remuneration and exceptional items
Slide 7: FY 2022 Operational highlights
FY 2022 Operational highlights Achievements People Acquisitions Restructuring team again the Continued growth of One acquisition: Bridgeshield Asset most active in the administration colleagues YOY of 10% Management in April 22 appointment market. Consistent underlying market share at 13% Learning a
Slide 8: Corporate restructuring and corporate advisory services
Corporate M&A Advisory Raising and Forensic Covenant restructuring refinancing debt investigations advisory Strategic Corporate advisory advisory and Debt Dispute services Corporate valuations amendments governance Contentious and extensions Compliance and insolvency Raising capital risk advisory Pe
Slide 9: Memberships and international presence
Member of the International Association of Corporate Advisers (IACA) Corporate member of the IFT 8 International member frpadvisory.com 9 As at 30 April 2022
Slide 10: Revenue CAGR over 11 years
100.0 95.2 90.0 Underlying EBITDA* Revenue 79.0 80.0 Revenue CAGR over 70.0 11 years 63.2 60.0 * 54.3 £m 51.0 50.0 40.1 40.0 32.2 29.8 30.0 25.7 24.6 23.0 21.8 21.5 17.4 18.8 20.0 15.7 14.1 11.9 10.0 7.0 7.8 4.0 3.7 3.4 1.5 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ** * Adjusted
Slide 11: Market and Team growth
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Slide 12: Restructuring market overview
Restructuring market overview UK Businesses are facing disruption and Administration market still considered artificial: headwinds due fo: > Liquidity / balance sheet (cheap debt and > Input cost increases (energy, raw Government backed loans) supporting materials, wage inflation) troubled companies
Slide 13: Thousands
10.0% 25 20.0% 5 Thousands 18.0% 8.0% 20 16.0% 4 14.0% 6.0% 15 12.0% 3 10.0% 4.0% 10 8.0% 2 6.0% 2.0% 5 4.0% 1 2.0% 0.0% 0 0.0% 0 201020112012201320142015201620172018201920202021 201020112012201320142015201620172018201920202021 frpadvisory.com 13
Slide 14: Strong Corporate Finance progress
Strong Corporate Finance progress * Now c. 20% of FRP revenue (Corporate Finance and Debt Advisory combined) = FRP Corporate Finance represents the integration of acquired businesses JDC + Spectrum with the existing team = In FY 2022, 99 successful transactions with an aggregate deal value of £3 bil
Slide 15: Growing the team
Growing the team Targeted demand-led lateral hiring continued Partners 80 73 Colleagues - fee earners 317 288 Total fee earners 397 361 Colleagues - support 107 96 Total (exc Consultants) 504 A457 FRP frpadvisory.com 15
Slide 16: Growth strategy
Growth strategy ORGANIC " Positive market fundamentals, both restructuring and mid-market CF activity * Continue growing market share (across all pillars) * Retain and attract talent « Business development focus INORGANIC * Selective - subject to Cultural fit, Strategic fit and Economic fit = S acqu
Slide 17: Acquisition rationale: Bridgeshield
Type + team Share, 2 Partners + 5 Pillars Restructuring Broaden our service offering to cover Rationale property asset management services to specialist lenders Expanded relationships and Opportunities additional property services frpadvisory.com 17
Slide 18: Acquisition and team integration rationale
Type + team WIP, 2 Partners + 13 Share, 4 Partners +12 WIP, 1 Partner + 10 Share. 7 Partners + 20 Corporate Finance & Corporate Finance & Pillars Restructuring Restructuring Forensics Debt Advisory Combine 2 strongest Lead Advisory UK mid- teams dominate mid- Target region / need cap M&A Bolster 2 p
Slide 19: Financials
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Slide 20: Underlying adjusted EBITDA reconciliation
£m 2022 2021 Reported profit before tax (PBT) 15.1 16.6 Add back deprecation, amortisation and interest 2.6 1.8 Reported EBITDA 17.7 18.4 Add share based payment expense relating to the Employee Incentive Plan (EIP) 5.4 3.7 Add share based payment expense - Deemed remuneration 2.6 0.9 Underlying adj
Slide 21: Consolidated income statement
Year Ended Year Ended 30 April 2022 30 April 2021 Notes £'000 £'000 Revenue 95,156 78,987 Personnell costs 7 (58,796) (46,572) Depreciation and amortisation (2,131) (1,551) Other operating expenses (18,618) (14,027) Operating profit 6 15,611 16,836 Finance costs 9 (495) (233) Profit before tax 15,11
Slide 22: Consolidated balance sheet
Year Ended Year Ended 2022 2021 (restated) Notes £'000 £'000 Non-current assets Goodwill 12 10,200 9,600 Other intangible assets 12 727 794 Property, plant and equipment 13 2,847 2,241 Right of use asset 13 6,279 3,527 Deferred tax asset 18 2,431 925 Total non-current assets 22,484 17,087 Current as
Slide 23: Consolidated cash flow statement
Year Ended Year Ended 30 April 2022 30 April 2021 £'000 £'000 Cash flows from operating activities Profit before taxation 15,116 16,604 Depreciation, amortisation and impairment (non cash) 2,131 1,551 Share based payments: employee options 5,402 3,700 Share based payments: deemed remuneration 2,594
Slide 24: Outlook
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Slide 25: Outlook
Outlook FRP > FRPisaresilient business, with a track record of growth and a strong balance sheet > Uncertainties still remain over how long troubled businesses can continue in their current form or how proactive key creditors like HMRC and institutional lenders will be on addressing over-due debts.
Slide 26: Q&A
frpadvisory.com 26
Slide 27: Appendices
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Slide 28: Recent FRP transactions and appointments
FRP teams advise LDC and tech firm FRP’s teams advise Brentwood FRP administrators ensure FRP’s Corporate Finance team Babble on the company’s secondary Communications on expansion construction company can complete manage £100 million+ buyout of Mr MBO, funded by Graphite Capital. through the succes
Slide 29: Monthly Insolvency Statistics
Monthly Insolvency Statistics Key trends – insolvency Temporary Covid measures appointments: introduced 2,000 Insolvency appointments in May-22 (1,817) are 9% lower than in Apr-22 (1,995), but are still well above pre- 1,500 pandemic levels. The overall increase in insolvency 1,000 appointments is d
Slide 30: Monthly Administration Statistics
Monthly Administration Statistics Key trends – administration Temporary Covid measures appointments: 250 introduced May-22 (84) administration 200 appointments are well below the 2019 pre-pandemic average (151). 150 There were 95% more administration appointments in May-22 (84) than in May-21 (43),
Slide 31: Cash flow and net cash
Year Ended 30 April 2022 £'000 Net cash from operating activities 18,290 Net cash used in investing activities (5,779) Net cash (used in) / generated from financing activities (11,970) * Net increase in cash and cash equivalents 541 Cash and cash equivalents at the beginning of the year 24,383 Cash
Slide 32: Work in progress and debtor days
FRP provides services on credit and mandates take on average five A WIP (£M) vs WIP as a % of Revenue to seven months to complete, leading to a large unbilled revenue 40.0 60% (work in progress) balances. 35.0 50% 30.0 Larger, more complex administration appointments are more 40% 25.0 remunerative b
Slide 33: Acquisition history
Acquisition history No. of No. of non- Acquisition/vendor Asset acquired Month of partners partner P added _ staff added Baker Tilly (formerly Tenon) Purchase of Scottish Restructuring business Nov 2013 2 25 Restructuring partnership with offices in Leeds and BWC Stockton on Tees Corporate mid-marke
Slide 34: Investment case
et: Investment cc FRP = , frpadvisory.com | 34
Slide 35: Why Invest
Why Invest FRP > Strong financial track record-sustainable profitable growth demonstrated highly cash generative and profitable > Experienced management team and strong reputation/brand > Collaborative, entrepreneurial and meritocratic culture > Positive market dynamics and well positioned for futur