The recent financial disclosures from RBG Holdings have cast a shadow over its share price, delivering a stark 45% plunge.
- In early trading, this decline was catalysed by a 7% drop in turnover and a significant £5.7m loss for the first half of 2024.
- Compounding the impact, market expectations for the year were forecasted to be considerably unmet, stirring investor concerns.
- Strategic cost-saving measures, including a substantial £4.5m in reductions, have been employed in response to financial pressures.
- The legal services group remains optimistic about its restructuring and the potential for recovery, despite prevailing market challenges.
The recent financial disclosures from RBG Holdings have cast a shadow over its share price, delivering a stark 45% plunge. This precipitous drop sent the shares to a historical low of just 3.25p, underscoring the severity of the financial situation confronting the listed legal services company.
In early trading, this decline was catalysed by a 7% drop in turnover and a significant £5.7m loss for the first half of 2024. The company’s revenue succumbed to non-recurring costs amounting to £2.9m. These were primarily attributed to strategic restructuring endeavours aimed at reducing costs and emphasising core legal services.
The 2024 results are projected to fall considerably short of market expectations. RBG Holdings’ financial forecast highlighted an anticipated continued struggle throughout the remainder of the year, exacerbating investor apprehension. Despite these daunting forecasts, RBG has implemented strategic cost-saving measures, encompassing a £4.5m reduction in expenses. Surrendering the lease on its former headquarters, reducing headcount, and optimising outsourced services form the crux of these efforts.
These efforts are expected to positively influence EBITDA and profit before tax in the first half of 2025, with aspirations to concurrently diminish net debt, which had escalated to £24.3m. The legal group’s challenges were further compounded in 2023, with it selling its litigation funding arm, LionFish, and divesting from Convex Capital through a management buy-out backed by Knights.
Despite the current financial turmoil, RBG Holdings remains optimistic about its restructuring plan and recovery prospects. The company is investing in the potential organic growth opportunities within its legal services branches, Rosenblatt and Memery Crystal. The addition of nine new partners across 2023 and the first half of 2024 heralds potential revenue enhancements, as articulated by CEO Jon Divers, who emphasised the group’s streamlined focus and operational efficiency.
RBG Holdings is committed to navigating its financial challenges, with a focus on strategic restructuring and market adaptation.
