Fairpoint enjoys 20% boost in first-half revenue

LANCASHIRE-based consumer professional services specialist Fairpoint Group says its revenues have increased by more than 20% in the six months to June 30, compared with the same period last year.

The listed company, headquartered at Adlington, near Chorley, said the principal driver of the increase was the legal services business, which has almost doubled in size, benefiting from the contribution of the Colemans business acquired by the group in August 2015.

Fairpoint’s legal offer now represents 75% of the group’s revenues, it said.
As expected, the debt solutions and claims business areas continue to show declining revenues and profits due to adverse market conditions.

Group adjusted profit before tax is expected to be flat compared to the prior period (H1 2015: £4.1m). This reflects the continued transition of the group from a low growth, higher margin debt solutions company towards a higher growth, lower margin legal services business.

The company said its decision to exit debt management services due to regulatory changes impacting the whole sector would impact on group second half expectations.

The board expects the restructuring will give rise to exceptional charges in the second half of approximately £2m (£1m of which will be cash costs in 2016), and a non-cash impairment of the debt management intangible asset of £5m.
From 2017 the group will implement and benefit from a reduced cost base and a simplified business model, focused on its higher growth legal services segment.

Chris Moat, Fairpoint’s Chief Executive said: “We are pleased with the progress the Group is making as it transitions to a legal services focused business.

“By simplifying the business by exiting the DMP (debt management plan) segment we will be better placed to focus our resources on making continued progress in Legal Services which offers more attractive growth opportunities.

“We therefore believe the long term gain of being a focused business will outweigh any short term negative impact from our decision.”

Meanwhile, Fairpoint has appointed a new chief financial officer, David Broadbent, from August 1.

Broadbent has more than 20 years’ experience in professional and financial services. He was previously on the board of International Personal Finance plc from its initial listing in 2007 through to 2016, serving as finance director and more recently as chief commercial officer.