TIDMFEN
RNS Number : 0687P
Frenkel Topping Group PLC
07 February 2023
The information contained within this announcement was deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 as amended. With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
Frenkel Topping Group plc
("Frenkel Topping", the "Company" or the "Group")
Trading Update for the year ended 31 December 2022
&
Notice of Results
Strong financial performance and delivery against strategy in
FY2022
Positive start to FY2023, trading in line with expectations
Frenkel Topping (AIM: FEN), a specialist financial and
professional services firm operating within the personal injury and
clinical negligence marketplace, is pleased to provide the
following trading update for the financial year ended 31 December
2022 ("FY2022") and an outlook for the current financial year
("FY2023").
The Board expects to report revenues in line with expectations
of c.GBP24.8m (2021: GBP18.4m) and adjusted EBITDA of c.GBP6.1m*
(2021: GBP4.6m) for FY2022. Pleasingly, EBITDA margin has been
stable year on year at c25%. The Company had GBP5.0m of net cash at
the year end and remains debt free. Assets Under Management ("AUM")
has grown to GBP1,187m (2021: GBP1,174m) during the year GBP129m of
new AUM was added within the advisory business.
This performance demonstrates the Company's resilience in a
challenging financial market, as well as the progress made by the
Company in diversifying revenue streams via its focused acquisition
strategy and consolidation of the Personal Injury (PI) and Clinical
Negligence (CN) space.
Of note is the performance of the Group's discretionary fund
manager, Ascencia Investment Management ("Ascencia"), where assets
on a DFM Mandate increased to GBP715m (2021: GBP676m).
Comparing Ascencia's positive performance against a backdrop of
wider market contraction and material outflows further demonstrates
Ascencia's success in managing multi-asset investment solutions
that are positioned to capture the upside of market fluctuations,
while aiming to reduce the negative impact of market turbulence on
client assets.
Ascencia's strong performance in the previous financial year
continued last year, with the core risk-rated strategies
outperforming their respective Private Client Indices/ARC indices.
It is testament to the Group's in-house strategy and approach to
risk management and something the Board is justifiably proud of.
The Company views the Ascencia platform as a clear growth
opportunity in the coming years and a key tool to winning future
business. Ascencia portfolios are currently defensively positioned
given the uncertain and opaque investment outlook, with cash ready
to be deployed should the opportunity arise.
The Company has of course not been entirely immune to
challenging market conditions during the year. However, the modest
impact on the Group's recurring revenue, has been replaced by
transactional revenue delivered by the Group's businesses acquired
during the last 3 years, proving out the strategy of diversifying
revenue streams. By their nature the margin profile is a little
different on the transaction revenue and certain essential staff
costs and wage inflation has had a modest impact in the latter part
of the year, as well as funding the start-up of Keystone Case
Management.
The Company is also pleased to again report its outstanding
client retention rates at 99%.
The Company continued to make significant progress delivering
against its strategy of consolidating the pre-settlement
professional services marketplace in the PI and CN space,
positioning Frenkel Topping as a market leader in its sector.
During the first part of the year the Company acquired Cardinal
Management Limited, which is performing to plan, and it raised a
further GBP10m in July 2022 to support the M&A strategy,
completing two further acquisitions of Somek and Associates Ltd and
N-Able Services Ltd in September 2022, both of which have performed
to plan and in line with management's expectations.
Outlook
The new financial year has started well and the Board is
confident that the acquisitions made to date will continue to
contribute revenue and profitable growth to the Group. In January
2023, subsidiaries Forths Forensics and Bidwell Henderson Cost
Consultants (BH) both delivered record revenues and BH surpassed
its previous highest recorded number of files received by 20%.
During the year the Board also expects Keystone Case Management to
start contributing. Expectations for the year to FY2023 therefore
remain unchanged as a result to of the solid start to the financial
year.
Where appropriate the Company will endeavour to migrate AUM onto
the Ascencia platform to be managed internally in order to
mitigate, as far as possible, the impact of any future abnormal
market movements which Ascencia has demonstrably been able to do
during the year. It will also look to drive further synergies from
the acquisitions made and integrate them further into a unified
platform and offering by the Group. Finally, the Company is
planning some investment in data analytics in order to better
capture and optimise business development opportunities across the
platform.
Notice of results and update on strategy
A comprehensive update and review of the year will be provided
with the Company's annual results, as well as the presentation of
an ambitious growth plan.
Final results for the year ended 31 December 2022 are expected
to be announced on 24th April 2023.
* The financial expectations noted above are preliminary, and
subject to year-end financial close and audit review processes.
Adj. EBITDA defined as before share based compensation, M&A
strategy and re-organisation costs.
Richard Fraser, Chief Executive Officer of Frenkel Topping Group
plc, said:
"We are pleased to report on another year of delivery despite
challenging market conditions. A backdrop of market volatility
served to highlight the strength of the DFM subsidiary in the
Company's portfolio as well as our strategy of diversifying revenue
streams. We have executed the buy and build strategy outlined ahead
of our capital raise and we are in a strong position to accelerate
growth through the group in the coming years and to capitalise on a
significant opportunity in the personal injury and clinical
negligence space. I am incredibly proud of the teams efforts and
look forward to updating shareholders on progress at the time of
our results in April"
For further information:
Frenkel Topping Group plc www.frenkeltoppinggroup.co.uk
Richard Fraser, Chief Executive Officer Tel: 0161 886 8000
finnCap Ltd (Nominated Advisor & Broker) Tel: 020 7220 0500
Carl Holmes/Abigail Kelly/Milesh Hindocha
(Corporate Finance)
Tim Redfern / Charlotte Sutcliffe (ECM)
About Frenkel Topping Group
The Frenkel Topping Group of companies specialises in providing
financial advice and asset protection services to clients at times
of financial vulnerability, with particular expertise in the field
of personal injury (PI) and clinical negligence (CN).
For more than 30 years the Group has worked with legal
professionals and injured clients themselves to provide
pre-settlement, at-settlement and post-settlement services to help
achieve the best long-term outcomes for clients after injury. It
boasts a client retention rate of 99%.
Frenkel Topping Group is focused on consolidating the fragmented
PI and CN space in order to provide the most comprehensive suite of
services to clients and deliver a best-in-class service offering
from immediately after injury or illness and for the rest of their
lives.
The group's services include the Major Trauma Signposting
Partnership service inside NHS Major Trauma Centres, expert
witness, costs, tax and forensic accountancy, independent financial
advice, investment management, and care and case management.
The Group's discretionary fund manager, Ascencia, manages
financial portfolios for clients in unique circumstances, often who
have received a financial settlement after litigation. In recent
years Ascencia has diversified its portfolios to include a
Sharia-law-compliant portfolio and a number of ESG portfolios in
response to increased interest in socially responsible investing
(SRI).
Frenkel Topping has earned a reputation for commercial
astuteness underpinned by a strong moral obligation to its clients,
employees and wider society, with a continued focus on its
Environmental, Social and Governance (ESG) impact.
For more information visit: www.frenkeltoppinggroup.co.uk
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