RBG Holdings, a significant player in the legal sector, faces renewed financial challenges.
- Last week, RBG Holdings’ second largest institutional investor, Dowgate Group, divested most of its shares.
- RBG’s share price plummeted to 2p following this major sell-off by Dowgate Group.
- Financial forecasts predict that RBG’s annual results will fall short of market expectations.
- Despite restructuring efforts, investor confidence in RBG remains tenuous.
RBG Holdings, a prominent legal services entity, has recently encountered further financial adversities. The company’s struggles intensified as Dowgate Group, once its second largest institutional investor, opted to sell the majority of its holdings. This significant reduction saw Dowgate’s stake diminish from 14.1% to just under 3%, signalling a waning confidence in the company’s future prospects.
The fallout from Dowgate Group’s decision was swift, as evidenced by the sharp decline in RBG’s share price to merely 2p, closing at 2.13p by the week’s end. This follows a turbulent period where RBG’s share price experienced a nearly 50% drop in value, attributed to a reported 7% decrease in turnover and a £5.7 million loss in the year’s first half.
RBG’s financial outlook appears bleak, with the company forecasting that its annual results will fall significantly below market expectations. This has perpetuated a downward trend in share price, which began with a stark warning issued last December about potential poor results for 2023, culminating in a 14% revenue decline.
The company’s attempts at restructuring, intended to streamline operations by shedding its litigation funding business and M&A advisory firm, have yet to restore investor confidence. Such efforts align with Dowgate’s previous sentiments on the importance of focusing on core legal services to enable recovery.
Despite these setbacks, founder Ian Rosenblatt retains a significant holding, remaining the largest shareholder with a 20.5% stake, followed by Premier Miton Investors at 15.7%. However, with Dowgate’s exit, Kempler Capital Management now ascends as the third largest stakeholder with a 4.3% share. The emphasis seems to be on returning to foundational practices, yet the market awaits tangible results.
RBG Holdings’ future remains uncertain as it grapples with financial instability and strives to regain investor trust.
