Fairpoint increases its 2014 full year dividend by 7%

DividendMax Ltd.

Fairpoint increases its 2014 full year dividend by 7%


A strong financial performance, with a significant maiden contribution from consumer legal services.

Adjusted profit and revenues have increased at double digit rates compared to 2013

o Revenue increased by 35% to £38.3m (2013: £28.4m)

o Adjusted profit before tax increased by 15% to £9.3m (2013: £8.1m)

o Adjusted basic earnings per share increased by 14% to 17.17p (2013: 15.03p)

o Profit before tax of £3.4m (2013: £5.9m) after deducting exceptional acquisition and refinancing costs of £2.5m (2013: £0.6m) and the amortisation of acquired intangible assets of £3.3m (2013: £1.6m)

Transformation of Fairpoint as a result of successful diversification  

o Revenues from non-IVA activities rose to 65% of total revenue (2013: 42%)

o Acquisition in June 2014 of Simpson Millar LLP Solicitors ("Simpson Millar"), a consumer legal services business

o 62% year on year increase in DMPs under management at 31 December 2014 following acquisition, during the year, of three debt management books totalling nearly 17,000 plans  

Strong balance sheet, cash generation and new enlarged long term bank facilities provide platform for growth

o Net cash generated from operating activities (after deducting cash cost of exceptional items) of £5.7m (2013: £6.0m)

o Net debt of £7.6m at 31 December 2014 (31 December 2013: net cash of £2.8m), following cash investment of £14.0m in acquisitions (including related expenses) during the year

o New five year bank facility of £20.0m with AIB Group (UK) plc ("AIB") agreed in May 2014

Increased dividend reflecting strong profit performance and confidence in the future

o Final dividend proposed of 4.10p (2013: 3.85p), making a total dividend for the year of 6.40p (2013: 6.00p), an overall increase of 7%

Significant growth opportunities and strong start to 2015

o With net debt as at 31 December 2014 of £7.6m (£4.7m as at 28 February 2015) and a £20.0m financing facility, the Group is in a strong position to finance its strategy of investment and diversification both organically and by acquisition

o The acquisitions during 2014 have given the Group a strong start to 2015

o Further acquisition opportunities within legal services are currently being targeted

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