Fairpoint profits halve

AIM-listed consumer professional services company Fairpoint Group has seen its 2016 profits halve to less than £5m, and says 2017 will  be “a year of transition”.

It has announced expected pre-tax profits of £4.9m (2015: £10.5m) on revenue of £52.9m (2015: £54.1m) for the year to the end of December 2016.

Net debt at the end of 2016 was £19.9m (2015: £13.6m), after £3.2m of acquisition related payments.

The Lancashire company said management had taken action to improve cash flow, working capital and reduce costs and that the restructuring programme is “on track”.

The company, which described 2017 as a “year of transition” as the group rebases its near term expectations for Legal Services, has appointed David Broadbent, formerly the chief financial officer, as its new chief executive.

Mike Dunn, who joined the group in January, will continue, in a non-board capacity, as interim chief financial officer until a permanent replacement has been appointed.

David Broadbent, chief executive of Fairpoint Group said: “Significant work has been performed over the last three months to better understand the maturity of the legal case load, improve the visibility of results, and to deliver cost savings primarily within Debt Solutions and Group overheads.

“As a consequence, we expect 2017 will be a year of transition with significantly lower revenues in Legal Services coupled with a further contraction in revenues from Debt Solutions.

“However, we expect, in 2018, to benefit from an improvement in Legal Services revenues combined with the full realisation of the cost savings currently being made which should deliver a much improved trading performance.”

Fairpoint said dividends were being suspended until further notice.

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