ABS results: Fairpoint on the up but Minster Law sees turnover tumble
Moat: expect to continue to pursue acquisition opportunities
Fairpoint Group plc – the one-time debt management operation that has transformed into a mainly legal services operation – has reported a “strong financial performance” for 2015 and plans to keep growing in 2016.
With the brand of Colemans-ctts now absorbed by that of Simpson Millar, there will be a “major” marketing campaign this spring, along with WIP purchases and potentially further law firm acquisitions, it told the stock exchange yesterday.
The group saw revenue grow 41% to £54.1m in 2015, with adjusted profit before tax up 13% to £10.5m.
Legal services segment was responsible for £31.6m of this (58%) following last year’s acquisition of Colemans-ctts, and Fairpoint said it saw “significant growth opportunities” during this year.
CEO Chris Moat said: “Having established a wide range of capabilities in consumer legal services, we expect to continue to pursue acquisition opportunities whilst also developing our organic growth agenda.”
Investors were told that product development has continued, with the launch of around 70 fixed-fee services in personal, family, employment and travel law. “Simpson Millar’s first major unified marketing campaign is launching in the spring of 2016 via a mixture of print and online media.
“In addition, the business expects to make a small number of WIP acquisitions and is considering other commercial opportunities where it can deploy its core skill of applying process to professional services.”
Fairpoint also reiterated that its exposure to the government’s whiplash reforms is limited, with the kind of cases likely to be affected making up just 8% of its revenues.
“The group believes that its recently acquired legal processing centre positions [it] advantageously to manage such legal work at low cost. The board also believes that the changes proposed by the Chancellor may provide interesting acquisition opportunities.”
Meanwhile, turnover at Minster Law, which is owned by BGL Group, more than halved in the year to 30 June 2015, from £52m to £25m, the financial services business announced yesterday.
However, it added: “The transformation of Minster Law systems, processes and capabilities in order to better serve its customers in an environment of declining margins within the sector is making good progress.
“The business has been impacted by legislative changes arising principally from the 2012 Legal Aid, Sentencing and Punishment of Offenders Act, which have impacted the market for personal injury claims. This difficult operating environment resulted in a fall in revenue and a £35m loss that has negatively impacted revenue and profits at group level.”
The fall was compensated by a 6% rise in BGL’s income from insurance broking and price comparison, which hit £482m.
BGL is currently exploring the possibility of a public listing in London.
Leave a comment
* Denotes required field