Acquisition strategy paying off for financial and professional services firm

Annual profits and turnover at Frenkel Topping, the Salford-based specialist financial and professional services firm, have both risen, which CEO Richard Fraser said demonstrates the success of its acquisition strategy over recent years – on the same day the firm announced another deal to expand its services.

The listed group, which operates in the Personal Injury (PI) Clinical Negligence (CN) space, revealed revenues of £32.809m, up from £24.850m, and a pre-tax profit of £3.193, compared with £2.419m the previous year, for the year to December 31, 2023.

The total dividends proposed for the year are 1.375p per share (FY 2022: 1.37p), reflecting the board’s intention to continue to invest in the future of the business, it said.

The board added that it is pleased to report an encouraging start to the 2024 financial year.

These latest annual figures represent the 15th consecutive year of high client retention (99%) in investment management services, the group said.

Funds under management (FUM) of £1,335m (as at December 31, 2022: £1,187m) show a growth of 12%, despite turbulent markets.

Funds on a discretionary mandate of £820m (as at December 31, 2022: £715m) represent growth of 15%, showing the resilience of the portfolios, said the group.

New Money Market Solution was launched in June 2023 attracting investment of £39m as at December 31, 2023

During the first quarter of the current financial year, the group has signed a new £7.5m Revolving Credit Facility with Santander to support its growth and acquisition strategy.

This includes the strategic bolt on acquisition announced this morning (April 22) of Chester-based cost consultant, North West Law Services Limited.

NWL is a firm of cost consultants with more than 40 years of experience in the field that will add to Frenkel Topping’s expertise in the area and work closely with the teams at Partners in Costs Limited, Bidwell Henderson Costs Consultants Limited and A&M Bacon Limited.

Frenkel Topping is paying a total cash consideration of £2.75m for the acquisition.

The sellers, Lee Evans and Phil Roberts, intend to step back from the company over time and, following a managed handover, NWL will become part of the group’s Costs operating segment led by Rebecca Bidwell, Director of Strategy and Implementation.

CEO, Richard Fraser, welcomed NWL into the group, saying: “Over the years Lee, Phil and their team have built a leading legal costs consultancy business that was well known to the group prior to discussions commencing.

“The acquisition fits perfectly into our strategy of acquiring high quality, customer-focused businesses in the personal injury and clinical negligence market and builds on the successful acquisition and integration of our other costs businesses – Partners in Costs, A&M Bacon and Bidwell Henderson.”

Addressing the annual results, he added: “Our 2023 results demonstrate the success of our acquisition strategy over recent years and the resilience of our business against the backdrop of challenging and volatile market conditions which saw a modest impact on the year end outturn as previously announced.

“Non-recurring revenue has been pleasing, with 22% of the total 51% growth in this area coming from organic growth across our business units. This demonstrates the strength of the acquisition strategy, with the company demonstrably identifying businesses that the management has been able to grow and capture upside opportunities as well as diversifying revenue streams.

“We will continue to explore synergies, to invest in our people, data and technology in order to help us to further take advantage of opportunities that the enlarged group presents.”

He said: “Additionally, we have continued to grow our FUM, in no small part thanks to Ascencia, which has again beaten its benchmarks and shown agility in launching the new Money Market Solution in response to market dynamics and client demand. This product, assisted by the hard work and tenacity of our sales team, has attracted investment from both new and existing clients with £39m of assets added by the year end, generating revenue for the company and positive outcomes for our clients.

“We continue to be optimistic about our long-term goal to grow to 15% market share in each of our business units.”