Acquisition and finance costs dent Fairpoint profits
ACQUISITIVE debt management and legal services firm Fairpoint continues to grow and diversify but the cost of acquisitions has dented the bottom line.
The AIM-listed Chorley company said profits in the six months to June were up by 4% to £3.4m, after stripping out acquisition and refinancing costs.
After taking these charges into account pre-tax profits fell from £2.5m to £1m. Sales were flat at £13.9m.
The company is diversifying away from debt management work which now accounts for about 48% of revenue, down from 56% last year.
However, it continues to increase the number of debt plans under management, up 35% year-on-year following the acquisition of 9,000 plans in January. In June it increased the scale of its legal side with the £7.7m acquisition of law firm Simpson Millar.
Fairpoint said the integration of the business was going well and it will be earnings enhancing in the second half. Since the end of the period under review the group has acquired family law specialist Fosters and Partners and a further 9,000 debt plans through Debt Line Topco.
Chief executive Chris Moat said: “Fairpoint has continued to grow earnings in line with our stated strategy of diversification, with over 50% of revenues now being generated from non-IVA (individual voluntary arrangements) activities. This trajectory is expected to accelerate in the second half, driven by recent acquisitions combined with the market conditions in the IVA segment.
“An important step in our planned strategy of moving into legal services has been taken with the acquisition of Simpson Millar and integration activities are progressing well. The board is confident of making strong progress in the current year as we continue to reshape the business through our diversification strategy.”