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Liberum: FRP is oversold
Shares in corporate advisory group FRP (FRP) have fallen too far after strong full-year results, says Liberum.
Analyst James Allen retained his ‘buy’ recommendation and target price of 205p on the stock, which softened 0.8% to 129.5p on Wednesday, extending losses to 3.4% year to date.
The largely preannounced full-year 2024 results are ‘very strong and in line with expectations’, with news that it had acquired Lexington Corporate Finance, which ‘makes sense from a strategic rationale perspective and has been acquired at an attractive multiple’.
Allen left full-year 2025 estimates unchanged but said that the first quarter was a ‘good start’.
‘Activity levels remain high at FRP, earnings momentum is back on a positive trajectory, but the shares have derated materially, leaving the shares looking very oversold,’ he explained. |
De rigueur these days for the share price to fall no matter what the results it would seem. Anyway any more weakness this week it's on my add list. |
Superb results, good outlook and a growing cash pile to aid further growth. |
Lexington Corporate Finance looks like a quality acquisition. The business is run by an ex-PwC Partner who was head of corporate finance for the SW. Seems like a very good fit for bolstering mid-market activity in South Wales. Looking forward to presentation of full year results later this week. |
 The number of insolvency-related activities in the North West reached a 14-month high in May, according to new research from R3, the insolvency and restructuring trade body.
R3’s analysis of data provided by Creditsafe shows there were 452 cases of insolvency-related activity, which includes liquidator appointments, administrator appointments and creditors’ meetings, in the North West in May.
These figures were the highest since March 2023, when 476 cases were recorded.
Insolvency-related activity rose by 15% in May 2024, when compared with the previous month and rose by 16.5% compared with May 2023’s total of 388.
Fran Henshaw, Chair of R3 in the North West and also Head of Corporate Recovery and Insolvency at Beever and Struthers, said: “The monthly and yearly rises in insolvency-related activity in the North West reflect the challenging trading climate that many businesses are still experiencing post-pandemic, and the effects of the cost-of-living crisis.
“The cost of rent and raw materials are still key pressure points for many business owners, while demand to increase staff wages has left many businesses struggling to grow, pay their bills, or to pay off existing debt.”
The North West saw the second highest monthly total of insolvency-related activities of all the UK regions and nations in May, surpassed only by Greater London which recorded 607 cases. |
What's going on here? Especially considering the upbeat update a few weeks ago |
Interesting to see market reports re: Body Shop Administration.This is clearly going to be a very profitable deal for FRP with fees earned in terms of restructuring AND locating a purchaser.This is the kind of deal that separates FRP from BEG in terms of PE quality. |
Lapped up, the company is performing very strongly, the management shareholders have sensibly lightened their very substantial holdings before labour jack up cgt |
In fact it might be interesting if there's some TR-1's issued, given the low current II involvement here. |
Couldn't agree more J. It's even worse in the area of takeover bids.
Must admit I was expecting a far worse reaction than actually happened here. |
Its called a false market - only mugs who hadn't been told were buying.
Why don't they suspend the shares when they start offering them around? |
Well that explains the weakness |
Great result and bodes well for Beg too. |
FRP results to outstrip market expectations
By Alice Bird
17 May 2024
FRP results to outstrip market expectations
Revenues and EBITDA surpassed current market expectations in FRP Advisory Group's most recent financial year, with all five service pillars making "positive contributions".
In a trading update for the full year ended 30 April 2024, FRP said it achieved "profitable growth".
It expects to report revenues of £128m, up 23 per cent on the prior year, and adjusted EBITDA of £37m, up from £27m in 2023.
Both figures are higher than current market expectations. |
The company has beaten it's forecasts " significantly ".
There will be some massive upgrades for the current year. |
seems that a small beat on revenue results in a big leap in adjusted EBITDA though always wary of the latter metric, need to dig into the accounts to work out the adjustments particularly share based payments. also note they worked on admin of Inland, one of my poorest investment decisions years ago... |
They almost do themselves down a bit - £37m adj EBITDA vs £32m consensus isn't ahead, it's significantly ahead! |
very strong trading update this morning - seems to be doing better than Begbies.. |
Very interesting acquisition today. Hilton Baird are a strong financial brokerage operating in the invoice finance/asset-based lending marketplace. They should dovetail in very well with FRP's Debt Advisory and Restructuring teams. Good to see how FRPs acquisitions glue their various service lines together. |
Just read the above and agree ThropeMatt. Further backed up by article in the Times stating insolvencies are starting to shift to bigger companies - FRP's ideal territory. Good value at the current share price IMHO. |
I have bought a few of these. Have enough for the time being now I think.
Mostly insolvenices happen toward the latter part of a slowdown and in addition tend to be linked to higher cost of capital (which in itself takes a while to bite).
Also acting as a tailwind will be the potential for those companies with strong business models and balance sheets to acquire those in distress. FRP's M&A services should see a pick up in demand I believe.
Broker's forecasts have seen a pick up of late. Converesely the share price has continued to bottom out. We are still below both 50 and 200 day MA.
Might take a little while to play out, so the strong divi will come in handy. |
It's quiet around here! IMO a new higher-low being confirmed |
Breaking news - FRP have been appointed administrators for the Body Shop.
One of the highest profile contracts they've secured. |
Interesting little closing (UT) trade today. |
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