Shares in legal services firm RBG Holdings (RBGP:AIM) jumped 11% to 133p after the company posted solid results for the year to December and announced an acquisition which effectively doubles the group’s turnover in one fell swoop.
STRONG CORE BUSINESS
Total revenues for the group were up 8% to £25.6 million last year thanks to a 12.6% rise in professional services billings to £22.4 million and £3.1 million of realized gains on litigation assets.
Within professional services, the Rosenblatt law business saw a 15% increase in revenues to a record £20.9 million thanks to a doubling of income from its corporate dispute resolution arm.
The results exclude five contingent cases, while the firm notes that ‘some larger investments provide a potential return that is not provided in market forecasts’.
The two newer businesses - LionFish Litigation Finance, which finances third-party cases, and Convex Capital, which advises on corporate deals - put in a creditable performance with a strong improvement in the latter stages of last year as markets regained confidence.
MAJOR ACQUISITION
Alongside its results, RBG revealed it had acquired specialist international law firm Memery Crystal for £30 million comprising £18.8 million in cash, payable in two tranches and part-funded by a new £10 million loan facility, and £11.2 million in new shares priced at 115p each.
Founded in 1978, the firm has 146 employees including 29 partners and another 66 fee earners - half as many again as RBG - and generated revenues of £23.2 million in the year to last April, or more than the current Rosenblatt business.
It offers legal services in corporate law - including what RBG describes as ‘a market-leading corporate finance offering’ - real estate, intellectual property and technology, and banking and finance, and it has recently branched out into advising the UK cannabis sector ‘on a wide range of business issues’.
RBG chief executive Nicola Foulston described the deal as ‘transformative’, adding ‘Memery Crystal is a very successful firm, which combined with our commercial focus on margin and cash, can be even more profitable’.
