Frp Advisory Group Plc · LSE:FRP
Frp Advisory — H1 2021 Earnings Presentation
38 slides from Frp Advisory's earnings presentation, Dec 16, 2020
Slide 1: Interim results presentation
Interim results presentation H1 2021, 6 months to 31 October 2020 16 December 2020 frpadvisory.com
Slide 2: Presentation team Strategy Financial highlights
Presentation team 3 Strategy 4 Financial highlights 7 Operations 8 Strategic update 13 Financials 15 Outlook 22 Q&A 24 Appendices 25 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 > +44 (0)1277 503 333 > gavin.jones@frpadvisory.com FRP Jeremy French Chief Operating Officer > +44 (0)1277 503 333 > jeremy.french@frpadvisory.com frpadv
Slide 4: Strategy
Continue delivering a high-quality service to achieve the best possible outcomes for stakeholders, enabling us to grow profitably and remain highly cash generative Focus is organic growth including attracting talented lateral hires at all levels who bring new skillsets and referral relationships Ino
Slide 5: 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 6: Service lines
Raising finance Pre-lending reviews Independent business reviews Administrations Management Raising finance Contingency planning Corporate restructuring buyout/buy-in Management buyout/buy-in Company valuations Contentious insolvency Company valuations Company valuations Special situation M&A Volunt
Slide 7: Financial highlights
2021 H1 - £35.9m 2021 H1 - £9.7m Interim dividend for H1 2020 H1 - £31.4m 2020 H1- £9.1m 2021 2021 H1 – 85 (National statistics down 19%) 2021 H1 - 331 2020 H1 - 84 2020 H1 - 270 2020 H1 - £0.6m * Adjusted for exceptional items, share based payments and normalized, the pre-IPO full distribution part
Slide 8: Operational highlights
Operational highlights High profile New Partners and Newcastle Safety and well-being administration fee earners +23% of staff appointments – year-on-year East Anglia Debenhams and Seamless delivery of EWM Two new Board Kent client service members CFO Utilisation at 64% and NED No colleagues (up 2%)
Slide 9: Memberships and networks
Member of PrimeGlobal, International network Corporate member of the IFT Updated December 2020 frpadvisory.com 9
Slide 10: Headcount: partners and colleagues
Partners 61 51 52 Colleagues – fee earners 270 230 218 Colleagues - support 81 70 69 Colleagues – sub-total 351 300 287 Total 412 351 339 Total fee earners 331* 281 270 *A majority of the hiring happened at the end of the first half i.e. 27 staff joined with the two September 2020 acquisitions. Thes
Slide 11: Administration market and FRP market share
1000 25,000 200 6,000 7% CAGR 7% CAGR 800 20,000 5,000 160 4,000 600 15,000 120 3,000 400 10,000 80 2,000 200 5,000 40 1,000 0 0 0 0 2013 2014 2015 2008 2009 2010 2011 2012 2016 2017 2018 2019 2020 (31 Oct) FRP market share in administrations has grown from 4% to over 10% since 2011 Administration c
Slide 12: Covid-19 impact on the UK insolvency market
The government The 2019/2020 begin to roll out financial year ends support schemes. on 5 April 2020. The Covid-19 pandemic and related government support measures have had a significant impact on the UK insolvency market. Support via Government backed loan schemes (bounce-back, FRP acquires RSM FRP
Slide 13: Strategic update
frpadvisory.com 13
Slide 14: Acquisitions: Newcastle, East Anglia, Kent
Corporate Finance & Pillars Restructuring Restructuring Forensics Combine 2 strongest teams dominate mid- Target region / need Kent Bolster 2 pillars market presence to win local business Rationale Target region / need EA Little team over-lap presence to win local Kent has European links business Ma
Slide 15: Financials
frpadvisory.com 15
Slide 16: Basis of preparation and group structure
The group, now headed by FRP Advisory Group plc was formed through a re-organisation on 6 March 2020 (IPO AIM listing). The Financial Statements have been prepared under the principles of merger accounting, to reflect the Group as if it had been headed by FRP Advisory Group plc continuously through
Slide 17: Revenue and underlying EBITDA
*Adjusted for share based payments, exceptional items and normalized, the pre-IPO full distribution partnership model has been adjusted to reflect the post-IPO compensation model frpadvisory.com 17
Slide 18: Underlying Adjusted EBITDA reconciliation
Reported EBITDA 8.0 0.9 3.1 Add Exceptional IPO costs incurred since listed 0.4 Add 10 months EBITDA and exceptional IPO costs incurred before 2.9 listing by partners Add full distribution partner compensation 15.2 23 Deduct post IPO partner compensation (7) (10.9) Add share based payment expense re
Slide 19: Comprehensive income
Comprehensive income FRP Unaudited Unaudited Audited 6 months ended 6 months ended Year Ended 31 Oct 20 31 Oct 19 30 Apr 20 £'000 £'000 £'000 Revenue 35,874 31,358 63,187 Personnel Costs (21,226) (24,960) (42,692) Depreciation and amortisation (764) (735) (1,359) Other operating expenses (6,625) (5,
Slide 20: Financial position
Financial position Unaudited Unaudited Audited 6 months ended 6 months ended Year Ended 31 Od 20 310d 19 30 Apr 20 Notes £'000 £000 £000 Non-current assets Goodwill 3,960 730 750 Other intangible assets 828 1 - Property, plantand equipm ent 2,188 1,766 1,994 Right of use asset 4,162 4 AGT 3,995 Tota
Slide 21: Cash flow statement
Unaudited Unaudited Audited 6 months ended 6 months ended Year Ended 31 Oct 20 31 Oct 19 30 Apr 20 £'000 £'000 £'000 Cash flows from operating activities Profit before taxation 7,131 - 2,906 Depreciation, amortisation and impairment 764 583 1,359 Share based payments 1,599 - 361 Net finance expenses
Slide 22: Outlook
eis . frpadvisory.com | 22 i
Slide 23: Outlook and current trading
• Track record of growth regardless of the macro-economic conditions in the UK • Flexibility in our internal capacity - well positioned for an increase in demand for our services • Steady growth and utilisation rates maintained by continuing to win larger projects and market share, while sharing spe
Slide 24: Q&A
frpadvisory.com 24
Slide 25: Appendices
frpadvisory.com 25
Slide 26: Investment highlights
• Consistent, profitable growth; highly cash generative with a strong balance sheet and planned high dividend payout ratio. • Resilient business; a strong track record of growth regardless of the macro-economic conditions. In addition, multiple panel statuses secured, including pension protection fu
Slide 27: Revenue and underlying EBITDA over nine years
£m 70.0 63.2 60.0 54.3 51.0 50.0 CAGR over 40.1 9 years 40.0 35.9 32.2 29.8 30.0 24.6 21.8 21.5 18.8 20.0 17.4 15.7 14.1 11.9 9.7 10.0 7.8 7.0 4.0 3.7 3.4 1.5 - ** 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1 Underlying EBITDA* Revenue * Adjusted for exceptional items and normalised, th
Slide 28: Employee Benefit Trust and share-based payments
At IPO the partners gifted £15m worth of FRP shares to an Employee Benefit Trust (EBT). At the 80p float price this was 18.75m shares. This represented 7.8% of the issued share capital at the time. Nil cost options were awarded to staff depending on service / their contribution to the firm. These op
Slide 29: Deemed remuneration on acquisitions
Acquiring people businesses with referral relationships requires retaining these key people for a period post acquisition. Consideration which is “deemed remuneration” to be expensed through the P&L during the period of contractual service. IFRS 3 deems upfront consideration subject to a lock-in or
Slide 30: Management biographies: Geoff Rowley and Jeremy French
Geoff is the Group Chief Executive Officer and is a Certified Accountant and Licensed Insolvency Practitioner with 30 years’ experience including at firms RSM Robson Rhodes and PKF. Geoff is a Partner in the London Restructuring Advisory team and was joint founder of the business in 2010. Outside of
Slide 31: Management biographies: Gavin Jones and Nigel Guy
Gavin joined as Chief Financial Officer in 2020 and is part of the Group’s Management Board. He is responsible for all finance activities, investor relations and supporting the Partners and staff to deliver FRP’s growth strategy. He also oversees a number of the Group’s shared service functions. Gav
Slide 32: Non-Executive Directors
David has been a Non-Executive Director of the Group since 2010. David spent the majority of his career as a partner in the corporate law team at Travers Smith LLP. Since then, David has run his own corporate advisory business and held a number of Non-Executive directorships of private and listed co
Slide 33: Non-Executive Director biography
David is a Chartered Accountant and Insolvency Practitioner with experience across a range of sectors. David joined the Group as a Non-Executive Director in 2019 following a career in banking at Standard Chartered and Hambros, and as a restructuring Partner at PwC. Spanning a period of over 20 years
Slide 34: Restructuring advisory services
Our Partner-led team gives clear and honest advice. It’s what we’re known for. Our highly skilled experts have hands-on experience handling the difficulties you face. So, whatever the situation, we can address issues efficiently and sensitively. Wherever you are in the restructuring process, our tea
Slide 35: Corporate finance services
Your business evolves over time. As you grow and become more established, your aims, strategies and challenges change. You need advice that can guide you through every stage of your journey. Whatever your business goals, FRP has the corporate finance expertise to help you. Every business is unique,
Slide 36: Debt advisory services
At FRP, our partner-led approach helps private companies and private equity-backed businesses raise and refinance the debt capital they need. Our broad-based advisory services underpins our exceptional track record of success across all debt types and structures. Our lender network spans the entire
Slide 37: Forensic services
Very few businesses operate without having to deal with some unexpected and potentially disruptive events at some point. The right advice can help you minimise disruption and start moving forward. FRP’s forensic accounting expertise and innovative forensic technology solutions create constructive re
Slide 38: Pensions advisory services
We don’t overcomplicate matters or overwhelm you with bulky reports. Instead, we give you advice tailored to your pension scheme and your situation. So you have all the information you need to make decisions with confidence. We use our financial review, restructuring and corporate finance experience