Foulston: Sound balance sheet
Listed law firm Rosenblatt has not yet experienced any impact on its trading since the start of the coronavirus crisis, but is to delay paying out dividends to investors.
Unlike many quoted companies, RBG Holdings plc – the AIM-listed parent company – is not planning to delay publication of its full year results later this month, and yesterday’s update said it expected its 2019 results to be in line with market expectations and thus “significantly ahead” of 2018.
The litigation-focused practice told investors that workflows since December’s general selection have been “strong”.
It continued: “Since moving to remote working [due to the coronavirus], the firm has seen no change in existing instructions with work proceeding as planned across all practice areas.
“Furthermore, Rosenblatt has received new instructions as a result of client need for financial restructuring and employment-related issues.
“As such, the group is not experiencing an impact to trading. However, like all businesses the Company is conducting regular stress tests and reducing all non-essential costs.”
The group’s other business, Convex Capital – a specialist sell-side corporate finance boutique bought last September for up to £22m – has “a strong pipeline of transactions, including those that were ongoing at the time of the government lockdown”.
However, the company said the lockdown “has the potential” to delay the completion of some deals.
The update said Rosenblatt has always encouraged flexible working as part of its business model and so has been able to switch to this and operate at normal capacity.
“The group has a sound balance sheet, with cash of £0.7 million as at 31 March 2020 and no debt. Cash collections remain as forecast. The company also has a £10m revolving credit facility with HSBC…
“While the board considers the group to be in a strong position, it has decided to postpone the decision on the payment of the company’s interim dividend until May 2020.”
Chief executive Nicola Foulston said: “We are continuing to serve our clients and seeing new instructions as businesses need our support to meet the challenges they face.
“The group has a sound balance sheet, and while we are carefully monitoring the situation, we are confident that the company will come through the present situation in a strong position.”
Speaking at last year’s Legal Futures Innovation Conference, Ms Foulston explained how Rosenblatt “unashamedly” targeted high-margin work and was twice as profitable as any other listed law firm.
Rosenblatt is the last of the listed firms to provide an update on its performance in light of the coronavirus.
Both Gateley and Ince cancelled upcoming dividend payouts, while Knights has cut the pay of staff earning more than £30,000. DWF is seeking more “headroom” from its lenders as a precaution, while Keystone Law – whose lawyers already worked remotely – cancelled its dividend for the same reason.
The Anexo Group – which owns personal injury firm Bond Turner – has put the firm’s new Leeds office on ice.
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