FRP has appetite for acquisitions as surge in demand for turnaround services expected

Geoff Rowley, FRP

Listed business advisory group FRP expects “greater volumes” for its restructuring teams across the country as business conditions worsen and has the cash to make acquisitions of its own.

In a trading statement to the stock market this morning the company said it expects to report revenues for the full year to 30 April 2023 of £104 million, up 9% on the prior year (FY 2022: £95.2 million), and adjusted underlying EBITDA of £27 million, up 5% on the prior year (FY 2022: £25.7 million).

The turnaround and recovery side of the business has overall market share of 14%, up from 13% previously, and claims to be well placed to take on further work.

The firm has teams in Manchester, Preston, Nottingham, Leicester, Birmingham, Leeds and Bristol amongst its network of 25 regional offices.

“Given the long list of well documented headwinds facing UK corporates including continuing interest rate rises, supply chain disruption, input cost inflation (i.e. wages, energy, supplies and materials), Brexit and the withdrawal of pandemic support measures, it is expected that the administration market should experience greater volumes during financial year 2024 and FRP is well placed to serve this market,” the update said.

Geoff Rowley, chief executive, added: “Whilst the UK economy continues to be impacted by uncertainty, FRP remains well placed to serve our clients across the entire economic life cycle and we will continue to invest to ensure we are able to develop our team and client offerings. Recent activity levels have been encouraging and we start our new financial year with confidence.

“The medium-term outlook for our markets remains positive and we have sufficient resource flexibility to respond to an increase in demand for our services.”

The company is also in the market for acquisitions and has an undrawn revolving credit facility of £10 million with Barclays Bank and a net cash balance of £22.9 million.

FRP also expects growth for restructuring advisory services will continue to increase.

FRP Corporate Finance successfully closed 73 transactions in FY 2023 with an aggregate deal value of £1.8 billion and £0.8 billion of debt raised. FRP was the 13th most active M&A adviser in the UK by deal volume, maintaining its position in the market (source: Experian’s MarketIQ). An average deal value of £25 million for the year places FRP Corporate Finance in the heart of the UK SME market.

However, deals are taking longer to close due to more transaction due diligence and scenario analysis given the increased cost of borrowing and inflation, reflecting a more cautious attitude of buyers and capital providers, it was claimed.

The business has also launched a new Financial Advisory service to offer financial and pre-lending reviews, financial modelling expertise and wider transaction services including financial due diligence for buy-side and sell-side transactions; as a response to demand from banks and private equity.  

FRP’s forensic services team have been deployed to carry out independent investigations at WANDisco and Inland Homes.