- Full-year revenue and profit beat
- Administrations increase 22%
- Positive outlook
Business advisory specialist FRP Advisory (FRP:AIM) has revealed full-year revenue to the end of April grew 23% and profit increased 37%, both ahead of market expectations, sending the shares up by a tenth to 142.1p.
Today’s gain lifts the shares back into positive territory for the year to date and means they are up 27% over the last 12-months compared with a 2% fall in the FTSE AIM All-Share index over the same period.
Subject to audit, the company expects to report full-year revenues of £128 million and adjusted underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) of £37 million.
Consensus expectations currently sit at £123 million and £32 million respectively, in line with guidance the company provided at the half-year results.
INCREASE IN ADMINISTRATIONS
The company highlighted a ‘challenging’ year for UK businesses which caused the number of company administrations to increase by 22% with the construction and retail sectors bearing the brunt of the pain.
This tailwind has kept FRP’s restructuring team busy with some high-profile appointments including the Body Shop, WiggleCRC and Readers Digest.
FRP Advisory said it has strengthened its market leading position, where it has remained the most active administration appointment taker by volume and increased its market share to 16% from 14% in 2023.
Growth was achieved across the different business lines with all five service pillars making positive contributions. Strong trading resulted in net cash on the balance sheet increasing to £29.7 million from £22.9 million in 2023.
Looking ahead, chief executive Geoff Rowley said activity levels across all locations and business lines are encouraging, adding, ‘as a result, we start our new financial year with confidence of making further positive progress.’
ANALYST UPGRADES
Berenberg analysts James Bayliss and Adam Chantry described the results as ‘highly impressive’. They increased their EBITDA forecast for 2024 by 16% and pushed through similarly-sized upgrades for 2025 and 2026.
‘With a net cash balance sheet, and a history of starting the year cautiously before reducing conservatism over the period, we think there is potential for upside risk to numbers on both an organic and inorganic basis,’ said the analysts.
