City round-up: Frenkel Topping; Redx Pharma; Lookers
Salford-based Frenkel Topping Group has registered a strong first half, and expects to continue momentum for the remainder of the year.
The group, a specialist professional and financial services firm operating in the personal injury (PI) and clinical negligence (CN) space, issued a trading update for the six months to June 30, 2023, ahead of the announcement of its half year result on September 29.
Unaudited revenues for the half year are £16m, a 44% increase, while EBITDA of £3.5m is a 30% improvement on the same period last year.
It said assets under management (AUM) grew to £1.261bn (HY2022: £1.155bn). The company is also pleased to again report its outstanding client retention rate maintained at 99%.
It said this performance demonstrates the company’s continued resilience in a challenging financial market, as well as the progress made in diversifying revenue streams via its focused acquisition strategy and consolidation of the PI and CN space.
Of note is the performance of the group’s discretionary fund manager, Ascencia Investment Management, where assets on a DFM Mandate increased to £761m (HY2022: £667m).
As seen in the previous financial year the group’s recurring revenue has continued to be supplemented by transactional revenue delivered by the businesses acquired during the past three years, underlining the success of diversifying revenue streams, seeing total revenues at £16m, but with a consequential change in margin profile.
The company’s group businesses have enjoyed real momentum in the period with Cardinal Management adding two new sites to its Major Trauma Centre portfolio in recent months through John Radcliffe Hospital, run by Oxford University Hospitals NHS Foundation Trust and Alder Hey Children’s Hospital opting to join Cardinal after a competitive tender process.
The business, headed by CEO, Richard Fraser, said it goes into the second half of the year carrying real momentum from half one, benefiting from the diversification of revenue and encouraging growth in transactional revenue.
It said: “We do expect financial markets to remain challenging, which will continue to moderately impact AUM growth and the company’s recurring revenue generated from this. However, the board maintains confidence in the full year outturn and its expectation for the year which are tracking in line with management’s expectation.”
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Sarah Gordon-Wild
Cheshire drugs discovery company, Redx Pharma, said Sarah Gordon-Wild, independent non-executive director, has resigned, for personal reasons, as a director of the company effective at the end of its current financial year on September 30, 2023.
Ms Gordon-Wild was appointed to the board on June 1, 2020. She currently holds 1,316,587 shares in the company, representing 0.39% of the issued share capital, and intends to continue supporting the company as a shareholder.
She also holds 200,000 options over shares in the company, two-thirds of which have vested and are exercisable as on July 1, 2023. The unvested share options, and the vested share options to the extent not exercised, will lapse on Ms Gordon-Wild’s resignation becoming effective.
At this time, the company does not intend to appoint a replacement independent non-executive director to the board following Ms Gordon-Wild’s resignation becoming effective.
Ms Gordon-Wild is currently chair of the remuneration committee and a member of the audit committee of the board. Following her resignation becoming effective, it is intended that Dr Bernhard Kirschbaum will be appointed chair of the remuneration committee. The board does not currently intend to appoint a replacement director for Ms Gordon-Wild to either committee.
Dr Jane Griffiths, chair of the board, said: “On behalf of the board, I would like to thank Sarah for her significant contribution over the last three years and for her ongoing commitment to the company as a shareholder. We wish her all the best in her future endeavours.”
Shares in Redx rose by 12.8% to 26.5p yesterday following its announcement that its zelasudil (RXC007), an oral, selective Rho Associated Coiled-Coil Containing Protein Kinase 2 (ROCK2) inhibitor, had received Orphan Drug Designation from the US Food and Drug Administration (FDA) for the potential treatment of Idiopathic Pulmonary Fibrosis (IPF).
Dr Jane Robertson, chief medical officer, at Alderley Park-based Redx, said: “We are encouraged by both the strength of our preclinical package as well as the clinical results to date and we look forward to reporting Phase 2a topline data in Q1 2024.”
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Lookers
Profits and margins have dipped at Lookers in the first half of 2023 following last year’s record figures. Underlying profit figure was down £1.1 million at £46.1m on top line turnover of £2.42 billion.
Lookers, currently the subject of a takeover bid by Global Auto Holdings, blamed “macroeconomic headwinds”.
Like-for-like new vehicle sales grew 16.1%, while used unit numbers were up 3.5% and aftersales revenue was up 13.5%. However, overall gross margin was down from 12.6% to 12.2%. The gross margin on new cars dropped to 8.4% from 8.6%, on used cars sales were down from 7.3% last year to 6.6% in the first half of 2023 and aftersales gross margin was now at 40.3% down from 41.8%.
Chief executive Mark Raban said: “We are encouraged by our good H1 performance, particularly the resilience of the group in the face of rapidly increasing interest rates and persistent cost pressures. We maintain a strong new vehicle order bank moving into the second half of 2023 but remain cognisant of continuing macroeconomic pressures.
“The board continues to believe that our business model and the advancement of our strategic priorities place the group at the forefront of integrated automotive retail in the UK. We expect inflationary cost pressures to continue and that the Bank of England base rate will stabilise in the near future. However, the board are confident that the business is well placed to respond to the continued challenging trading environment and maximise the strategic change opportunities ahead.”
