RBG Holdings reports a significant financial setback in the first half of 2024, primarily due to the general election.
- The legal group recorded losses amounting to £5.7 million, causing a drastic drop in share prices.
- Key areas of business suffered marked declines, leading to redundancies and cost-cutting measures.
- Revenue decreased by 6.8%, while net debt rose, highlighting challenges amid volatile market conditions.
- Despite adverse conditions, RBG remains optimistic about potential recovery in late 2024 and beyond.
RBG Holdings has declared a substantial financial loss of £5.7 million for the first half of 2024. This downturn has been largely attributed to the impact of the general election, which affected business operations significantly from May to June. The company’s shares experienced a steep 41% fall, marking a stark contrast to their value a year ago.
The business, inclusive of law firms Rosenblatt and Memery Crystal, noted a considerable drop in activity across several crucial sectors. In response to the challenging financial environment, the company initiated cost-saving strategies, including a notable reduction in staffing levels. The company reduced its average number of employees from 201 to 192, resulting in a redundancy cost of approximately £600,000.
Among the cost-cutting measures, RBG Holdings sold subsidiary Convex Capital for £2.6 million. Additionally, the group surrendered the lease on its St Andrew Street property, a move that saved around £4.5 million annually, as the property contributed to 40% of the group’s property-related expenditures.
Revenue saw a downturn of 6.8%, declining to £18.4 million, while the company’s net debt swelled from £21 million to over £24 million. A focal point for RBG has been the reduction of lock-up days, which dropped from 152 days to 125.
Despite these challenges, Chief Executive Jon Divers expressed a positive outlook, particularly pleased with September’s activity levels. Chief Financial Officer Kevin McNair emphasised that the simplification of the group to focus solely on legal services presents opportunities for optimising performance in the near future.
While the first half of 2024 presented tough conditions, particularly with an impending general election, RBG Holdings is cautiously optimistic that the latter part of the year and into 2025 may see improvement in market conditions.
RBG Holdings is facing significant financial challenges, yet holds an optimistic outlook for recovery.
