- Organic revenue growth over 20%
- Budget creates more opportunities
- CEO confident of full-year outcome
Specialist business services group FRP Advisory (FRP:AIM) delivered a strong first-half update with chief executive Geoff Rowley saying he was ‘confident’ in meeting market expectations for the full year.
The shares climbed 9p or 6% to a new 12-month high of 155p, topping their October peak.
STRONG ORGANIC GROWTH
Performance in the six months to the end of October was impressive, with the group expecting to post a 32% increase in revenue to £77.6 million driven by organic growth of 23% and 9% from acquisitions which made their first 12-month contribution.
On the same basis underlying adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to rise 44% to £22.3 million.
The firm said the half started well with the completion of a number of projects, including the administration of cosmetics retailer The Body Shop.
Following the election in July and in the run-up to the Budget there was a period of ‘stagnation’, with companies delaying decision-making, but the firm did see a spike in the number of solvent liquidations.
Post-budget, the increase in employers’ NIC (national insurance contributions) is likely to create additional headwinds for hospitality businesses with large workforces and low margins.
ON TRACK FOR FULL YEAR
On the corporate finance front, the pipeline of new opportunities is ‘solid’ and the firm has seen signs of an increase in restructuring-related M&A (merger and acquisition) activity as well as debt refinancing.
The financial advisory business has also been kept busy with firms carrying out financial due diligence, business valuations and pre-lending mandates, so all in all the group is confident of meeting its full-year revenue and earnings targets.
‘FRP has delivered another strong performance in the first half of the year, reporting increased revenue and profits’, said chief executive Geoff Rowley.
He added: ‘I am confident that we will make further progress in the remainder of the year, as we support corporates through the entire business cycle.’
