Frp Advisory Share Discussion Threads

[sunshine today] 19/4/2020 09:10

Devonking16 Apr '20 - 22:19 - 6 of 27

A quick scan of the news and it's clear FRP’s services are in demand. I’d recommend a read of the groups Article of Admission document for details on growth of case appointments, of note H1 FY20* Revenue of £31.4m, a good number given the strong margins reported back to FY17, and given there should be plentiful opportunities ahead to build
on for numbers to continue growth trend. Will be keeping an eye on this.


Devonking16 Apr '20 - 22:24 - 7 of 27


Anyone listened to the Stephen English webinar on piworld? He talks about FRP and speculates on the groups prospects - it's a good listen

[sunshine today] 19/4/2020 09:08

sunshine Today16 Apr '20 - 12:35 - 5 of 27

Debenhams and Carluccio"s are two very high profile retail companies that unfortunately for them have,ended up on FRP"s plate. Lets hope that as many jobs can be saved as possible. In one way I feel bad attempting to profit from current events, but in reality virus is just the trigger for the long overdue downturn in the economy.The borrowed money binge was going to end eventually no matter what

[sunshine today] 19/4/2020 09:06

sunshine Today15 Apr '20 - 13:04 - 4 of 27

The absolutely guaranteed numbers from this company over the next five years will be increased turnover.I am trying to put myself in one of the Partners chairs today.This is what I would do.Increasing gross revenues are useless unless they translate to profits so I would only take on business that will provide acceptable margins. I would demand payment for advice in advance or in escrow. Cash is King.A larger part of FRP "S income takes around a year to be settled it has to be certain, prior to work starting,on the Administration.Bad debts should never be the end result.Team size needs to be scaled up across the board to cope with the massive influx of work. The Term sheet charge out prices need to increase immediately to reflect the extra expansion costs as they occur. New projects require staggering,sadly companies will be going bust constantly for s very long time.Grabbing all the work in the next few months is not sensible.

[sunshine today] 19/4/2020 09:04

3rd eye15 Apr '20 - 11:17 - 2 of 27

Had a punt on this one in the last half hour FRP ..FRP ADVISORY GROUP PLC

Going to be plenty of companies going bust and into insolvency sadly over the next few months to a year. Been looking for a play on this and saw this from Fund Investor and proprietor of Kempton Holdings and a non-executive director of a number of quoted and private companies David Kempton.................

The awful wave of companies going into administration or restructuring will be of massive benefit to the specialists in that sector and I have bought FRP Advisory (FRP), floated on the Alternative Investment Market in early March at 80p. The shares have risen to 93p following strong news of significant restructuring and insolvency contracts, but are still on a PE below 10, looking good value compared to their peers in a, sadly, strong sector.



Some big corporate backers......... INCLUDING MITON

Shareholders

Name Equities
%
RBC Global Asset Management (UK) Ltd. 18,750,000 7.89%
Miton Asset Management Ltd. 18,124,164 7.63%
Liontrust Investment Partners LLP 17,550,000 7.39%
Premier Fund Managers Ltd. 3,800,611 1.60%
Danske Bank A/S (Investment Management) 2,245,245 0.95%



Business Summary

FRP Advisory Group PLC is a United Kingdom-based advisory services company. The Company’s services include restructuring advisory, corporate finance, debt advisory, forensic services and pensions advisory. Its restructuring advisory includes corporate financial advisory, formal insolvency appointments, personal insolvency and general advice. The corporate finance services include mergers and acquisitions (M&A), strategic advisory and valuations, financial due diligence, capital raising, special situations M&A and partial exits. The debt advisory services offered includes raising and refinancing debt, debt amendments and extensions, asset based lending and corporate and leveraged debt advisory. Its forensic services include forensic investigations, compliance and risk advisory, dispute services and forensic technology. The pensions advisory services include pension scheme transaction advisory, pension scheme restructuring advisory, covenant advisory and corporate governance.

[sunshine today] 19/4/2020 09:01

Trying to work out how well this company could do over the next ten years as a long term investment. In the uk we have just 1,860 insolvency practitioners licensed to perform the workload that increased 25% in 2019.
Reports in the press if accurate could see an increase in bankruptcy % terms of between 100 and 5,000. If the company is well run I would expect profits to surge.
It takes years to train and pass the exams only about 25 new entrants join each year. Pass rates are around 50% extremely tough. Teams that work under each partner can be quickly expanded from the pool of accountants that will sadly be unemployed in the near future.

FRP have been appointed as Administratiors on behalf of Debenhams and Carluccio"s in the last fortnight

[sunshine today] 19/4/2020 08:58

New to AIM March 2020

FRP is the only pure insolvency practitioner listed on the stock market. Another listed IP Begbies Traynor,BEG, has a 65% / 35% split the other 35% being in cyclical property,valuations auctions and so on. The big four also have insolvency departments.

FRP have been appointed as Administrators / Advisors on behalf the following recently


Bonmarche

Carluccio”s

Comet

Debenhams

Monsoon Accessorize

Koovs

Patisserie Valerie

YO!

Prezzo


Patisserie Valerie creditors, including former chairman Luke Johnson, have chosen a new administrator, paving the way for legal claims to be made against the collapsed cake and coffee chain's auditor Grant Thornton.

FRP Advisory, a restructuring firm that acted as liquidator for department store BHS, will replace KPMG.

Mr Johnson, a serial leisure entrepreneur who previously chaired Pizza Express and Channel 4, lost £160m when Patisserie Valerie imploded as "a direct result" of an alleged accounting fraud.

[sunshine today] 18/4/2020 12:46

At the end the first half 2019/20 each FRP partner was earning on average £1.2M.I have wanted to know how much they might earn if as expected revenues jump in 2020 - 2023.A clue can be found in the article above.Each restructuring partner at KPMG bought in over 5 million in revenue in 2018. No wonder they had no shortage of bids for that section of the business. I am not saying each FRP partner can do the same as those at KPMG but they can obviously handle more than their current income of £1.2M in the form of growth.

[sunshine today] 18/4/2020 12:22

nfs, a reasonable assumption


The big four are not always the first port of call, due to conflict of interest, one very good reason why FRP being independent, is growing so fast. The big four are in fact not that big KPMG has just 22 restructuring partners, less than half the 51 FRP has.



Restructuring partners at KPMG have held talks with the Big Four firm’s management about the future of the practice, which could be split off amid concerns about conflicts of interest that make it harder to obtain work.

Two people close to the professional services giant said that KPMG’s 22 restructuring partners in Britain had met to discuss whether the practice should leave the firm and how it would operate if it was to be a standalone business.

One partner said that bosses were “looking at all our options” and that no decision had been made.

[nfs] 18/4/2020 12:01

The big 4 accounting firms will be throwing bodies at this

[sunshine today] 18/4/2020 10:59

Yesterday’s BEG”S Red Flag has been picked up in the Daily Mail city pages this morning.What I find astonishing is the relatively tiny valuations put on the insolvency sector as a percent of the total stock markets valuation. Around £100M BEG and £250M at FRP.After deducting the shares in both companies that are not within the free float a total of about £170M.That for a sector that is or is about to pay growing dividends and has to be far safer than the so called bulletproof utility and tobacco stocks.A re rating of this sector is beginning right now. The amount of stock is extremely limited which may result in fierce competition to pick up worthwhile amounts of shares. It can’t be long before investors show up in droves seeking the opportunity. Newspaper headlines this morning are splattered with articles suggesting U.K. growth is falling at an astronomical rate of 35%. The Red Flag alert says half a million firms are on the edge with 10% of them in dire straits.To put things in prospective new issue FRP in the same sector handled 1,000 company failures last year.I have not looked up how many BEG did but is blatantly obvious they are going to do a huge number more in each of the next 5 years. Competition is a non starter the whole country has less than 2,000 insolvency partners who are licensed to carry out this occupation.A good proportion don’t even work directly on Administrations they work for the likes of the Inland revenue banks customs and so on.

[jeanesy] 18/4/2020 10:17

I agree sunshine today. I too have been researching the company . I made some good money from BEG when it became oversold at 60p but sold them to put my money into here, as i believe they have better prospects and BEG looks fully valued atmo. I believe parts of their business will see a downturn too , notably property.I like the fact that dividends will be paid here and in 2021 possibly every quarter which will be nice. The first half results were excellent and there is not going to be too long to wait for the full year ones as i believe the year end is April 30th.

[sunshine today] 18/4/2020 08:48

I really do like this company last night I had a good look through the above and was very impressed. See pages 14,15, and 16. Look at the fee earners at the end of April 2019. Scroll down we learn that by Feb 2020 the total number of fee earners had grown very substantial by 30%. That was the date the prospectus was published.

[sunshine today] 17/4/2020 20:13

7 Apr 2020 16.10 BST Last modified on Fri 17 Apr 2020 16.45 BST


At least seven Debenhams department stores will not reopen after the high street lockdown eases, resulting in the loss of more than 400 jobs.

The department store, which collapsed into administration last week, is understood to be exiting the seven stores, including in Salisbury, Westfield in west London, Leamington Spa, and South Shields, as it has been unable to reach agreement with landlords.

Deals have been struck regarding 120 of the chain’s 142 sites, which leaves the future of a further 15 outlets hanging in the balance.

All Debenhams’ stores closed temporarily on 23 March along with most of the rest of the high street after the government ordered a lockdown on non-essential retail in order to control the spread of coronavirus.

The shutdown has prompted fears that thousands of stores will never reopen as many already weak retail firms – which had been suffering from rising costs, the switch to online shopping and weak consumer confidence – struggle to cope with the loss of high street trade
Major names including Oasis, Warehouse and Laura Ashley have already called in administrators and other chains are expected to follow suit.

Debenhams, which has fallen into administration for the second time in a year, had already closed 22 stores as part of an attempt to rescue the business by its new owners, who are led by the US hedge funds Silver Point and GoldenTree. A further 28 were expected to close next year but it is clear those plans have been accelerated.

Stefaan Vansteenkiste, the chief executive of Debenhams, who is continuing to run the business in administration, said: “We have agreed terms on the vast majority of our UK stores and talks are proceeding positively on the remainder, positioning us to reopen these stores when government regulations permit.

[jeanesy] 17/4/2020 15:16

I see the shareprice of BEG has just shot up. Maybe tipped again. Should help the price here . It has had a good day though so far :)

[sunshine today] 17/4/2020 14:06

Regulator tells big four auditors to accelerate break-up plan

The FRC wants the firms to appoint an independent chair to oversee their ring-fenced audit operations, Sky News learns.

Mark Kleinman - City editor

Thursday 27 February 2020 14:05, UK

Contractors will be able to service existing debt and overdrafts

The role of the big accountancy firms has been under close scrutiny

The big four accountancy firms have been told by watchdogs to accelerate the ring-fencing of their audit businesses by bolstering independent governance and improving financial transparency.

Sky News has learnt that the Financial Reporting Council (FRC) wrote to the quartet - Deloitte, EY, KPMG and PricewaterhouseCoopers (PwC) - this week to set out details of the 'operational separation' blueprint that it hopes will improve audit quality following a string of corporate scandals.

In the letter, the FRC is understood to have told the four firms, which collectively have a dominant share of the market for auditing major listed UK companies, that they must create separate boards for their audit practices with an independent chairman.

The chair could not be a partner at the firm, although further details of the criteria to determine independence have yet to be finalised.

The big four will also be required to have a majority of independent directors on their audit boards, reflecting the governance code that applies to the quoted companies whose accounts they oversee.

The watchdog is also demanding that the big four begin developing separate profit and loss accounts for their audit practices to provide greater clarity about the financial health of the units

[sunshine today] 17/4/2020 13:53

Apparently the big four accountancy firms have not been doing a very good job. This is one example. At least two have now stopped giving advice where the also do the audit.The government has stopped short of splitting them up but is insisting they take action. FRP being a stand alone insolvency practitioner, is going to benefit. It’s another reason FRP has been growing, taking market share away from the big four. Brexit fears and now Covid is an unexpected addition.

Background news, it’s old. A government report has been published last year.



Big Four accused of 'feasting' on Carillion as combined £72 million fee revealed
12 March 2018 Consultancy.uk
Executives from the Big Four of PwC, EY, KPMG and Deloitte have come under pressure from MPs to justify their roles in collapsed outsourcer Carillion. A Parliamentary committee has suggested the gang of four were “feasting̶1; on the company’s “carcass”;, after emerged they had received a combined total of more than £70 million in fees from the beleaguered construction firm.

Last month Carillion filed for compulsory liquidation, after talks with potential lenders failed, putting thousands of jobs and businesses at risk. The company, headquartered in Wolverhampton, United Kingdom, ran into trouble after losing money on big contracts, as well as racking up unsustainable debts totalling around £1.5 billion.

The selection of an administrator proved uncommonly difficult for authorities, however, as it soon emerged that each member of the Big Four professional service firms had been in some way involved with the group, recently. EY, who were initially thought to be in line to oversee proceedings, were ruled out due to a role they adopted in July 2017, to help implement a strategic review with a focus on cutting costs, and collecting more cash from contracts.

Deloitte had been engaged for some time as Carillion’s internal auditors, alongside rivals KPMG, the external auditors of the firm. KPMG has since become the firm at the centre of the Carillion controversy, having fulfilled this role since 1999, through until the time of its profit warnings and consequent collapse. As a result, the Financial Reporting Council (FRC) is currently investigating the firm, covering the years of 2014, 2015 and 2016 and additional audit work carried out in 2017.

Big Four fees from Carillion since 2008

The Official Receiver (OR) has since stated that it considered PwC to be the only option to appoint as special managers to administrate the insolvency, as the only member of the largest auditing firms that would not have an immediate conflict of interest, stating it has been granted £150 million of public funds to run the Carillion liquidation.

However, PwC, has also been found to have had two separate roles in Carillion in the run up to its demise, including one advising the defunct company’s pension trustees. More recently, in its role as administrator, the firm provoked further ire for its alleged failure to supply axed Carillion workers with basic information, which they required to receive redundancy payments from the Insolvency Service.

£72 million bill
Now, following a steadily growing number of links between the four professional services giants and the collapsed contractors, the Parliamentary Committees for Work and Pensions and Business and Energy and Industrial Strategy have asked KPMG, PwC, EY and Deloitte to outline their involvement with Carillion over the last 10 years. The demand follows the publishing, by the two committees, of figures contained from letters from the four firms, revealing the large collective fee the firms had gleaned from Carillion-based work.

PwC was paid most of the four in fees, bringing in a total of £21.1 million, although it received the lowest amount directly from Carillion, with £8.5 million coming directly from the company. PwC brought in a further £6.5 million from government contracts it fulfilled as part of its work with Carillion, and £6.1 million from its work with the group’s pension schemes, something which none of the other firms supplied figures for.

When looking solely at money directly from Carillion, KPMG were the top earners. The firm – which also drew Parliamentary ire for its role auditing another floundering outsourcing firm, Capita – was paid £16.8 million by Carillion itself, along with £3.4 million from government work, totaling £20.2 million in fees relating to Carillion since 2008.

EY was paid £15.6 million from the company and £2.7 million in tax-payer funds, totaling £18.3 million from Carillion over the last 10 years, while Deloitte was paid £13 million. This consisted of £10.3 million from the company and £2.7 million from the government.

In response to the Big Four’s disclosures, Frank Field, chair of the Work and Pensions Committee, said, "The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens. We saw at the end of our evidence session that the former directors of Carillion are, unlike their pensioners, suppliers and employees, alright. These figures show that, as ever, the Big Four are alright too. All of them did extensive – and expensive – work for Carillion.”

The committees also pointed out that the past three Carillion chief financial officers were ex-Big Four. Richard Adam and Emma Mercer, the most recent CFO, previously worked at KPMG, while Zafar Khan and audit chairman Andrew Dougal worked for EY in the past.

Big Four response
In its response letter to the committees, KPMG said that it welcomes the FRC probe and believes, “it is important that regulators acting in the public interest review the audit work related to high profile cases such as Carillion”, having already stated that the Big Four firm believes it conducted its role as Carillion’s auditor “appropriately and responsibly”.

KPMG’s letter also sought to highlight that 14% of all its contracts with Carillion were making a loss at the end of 2016, and that KPMG reduced its audit fees from £1.8 million to £1.4 million between 2008 and 2016, despite its hourly fees increasing. However, the joint committees pointed out that KPMG’s letter also suggested that the firm did not press Carillion to disclose further information about adopting the new revenue recognition standard, despite the FRC stating in October 2016 that it expected most companies to have made "substantial progress in their implementation of these standards."

Big Four fees from Carillion since 2008

Leeds West MP, Rachel Reeves, chair of the Business and Energy and Industrial Strategy committee, said, "KPMG has serious questions to answer about the collapse of Carillion. Either KPMG failed to spot the warning signs, or its judgement was clouded by its cosy relationship with the company and the multi-million pound fees it received.”

In a further response to the committees’ comments, a KPMG spokesperson said, the firm welcomes the opportunity to appear before the joint committee on 22 February, as well as the chance to assist the inquiry with their investigations. This was something echoed by PwC, which released a statement saying, “It’s appropriate that the joint committee consider all aspects of the collapse of Carillion and we will continue to cooperate fully with their enquiries.”

The firm also sought to distance itself from the ill-fated final months of Carillion’s operations, stating, “The joint committee’s request for information dates back to 2008 and the majority of the work that PwC undertook directly for Carillion was carried out prior to June 2015 rather than in the last few months before its collapse.

“While there are only four large professional services firms, the market has been subject to extensive review by the Competition Commission (now succeeded by the Competition & Markets Authority) and European Commission. We comply with all rules that have resulted from these extensive reviews.”

While both EY and Deloitte declined requests from the press to comment, Steve Varley, UK chairman at EY, said in the firm’s letter to the committees, “We are saddened that such a solution could not be found and are very conscious of the impact the company’s collapse has had on its pensioners, employees, suppliers, sub-contractors and on those who rely on the services which they were providing. We therefore understand your concerns and the need to conduct this inquiry in a timely fashion. We believe it is important to ensure lessons are learnt from this matter.”

Despite the heightened scrutiny regarding the Big Four, the UK government has continued to place faith in their services elsewhere. Most recently, Deloitte has been positioned to monitor the situation at struggling construction firm Interserve, on behalf of the Cabinet Office.

Commenting on the reportedly dire situation at Interserve, which holds numerous public service contracts, and also has pre-existing business relationships with EY and PwC, a government spokesperson said, “We regularly meet with all of our suppliers to ensure the efficient delivery of public services. We do not believe that any of our strategic suppliers are in a comparable position to Carillion.”

[jeanesy] 17/4/2020 13:13

Ive decided to buy a few here after doing some research. I tend not to buy shares of newly listed companies until they have been listed a bit longer to see how they are doing. Not sure if the shares were priced to go in the original admission but surely they are in the correct sector !

[sunshine today] 17/4/2020 12:08

A month ago I knew absolutely nothing about the insolvency business. I am learning fast it’s extremely interesting. FRP admission prospectus is an up to date log full of facts.
Past administrations can be found all over the internet. From a shareholders stance one can pick up some snippets. Yesterday’s was FRP can and does charge what it likes for advice Pre Administration. After administration I think a standard charge sheet is used possibly across the industry. Anyone know .? The last few weeks would have been manic for sure. New rules have been bought in to ease the burden on the industry and more importantly to remove the risk of being sued so long as high standards are being maintained.This will enable more case work to be put through using standard procedures. They have also been given extended time frames for existing cases.

[devonking] 17/4/2020 11:28

What happens when the government begins to scale back and withdraw financial support for businesses, as is inevitable? Many businesses will be saved and go on to recover, but many essentially propped up by gov help wont.

Indicative of recent workloads?

“The diary is full of calls from half seven in the morning, and laptops are going down at midnight. You’re on calls relentlessly with directors and lenders. It has been very, very intense – very long hours and weekends,” says David Fleming, a debt and restructuring adviser at Duff & Phelps. (Telegraph Apr 2020)

[devonking] 17/4/2020 09:43

Coronavirus pushes financially distressed companies over the half-million mark
Record figure likely to be the tip of the iceberg, as full Covid-19 impact will build through Q2. Number of critically distressed companies jumps 10% in the last quarter

[jeanesy] 17/4/2020 09:30

thank you sunshine today

[sunshine today] 17/4/2020 08:49

Fast forward 30M minutes.



I find it hard not to get excited here. To get the only listing away on AIM this year was itself a fabulous achievement.It was also oversubscribed.From a shareholders point of view you can’t ask for much more. All the partners and the vast majority of the staff are all highly incentivised to grow the company and profits with the view of some of them cashing in after 3 years. That’s when the lock in ends. Between them they have way larger investments in their own company than, you would ever find in companies listed on LSE.

What I have learnt is this company knows a thing or two about margins, it’s success to date proves that.Going forward they can ensure they hold or increase them, as gross turnover goes up.