Fairpoint increases its 2015 final dividend by 6%

DividendMax Ltd.

Fairpoint increases its 2015 final dividend by 6%


A strong financial performance with significant growth in consumer legal services.

Adjusted profit and revenues have increased at double digit rates compared to 2014

o Revenue increased by 41% to £54.1m (2014: £38.3m)

o Adjusted profit before tax increased by 13% to £10.5m (2014: £9.3m)

o Adjusted basic earnings per share increased by 12% to 19.29p (2014: 17.17p)

o Exceptional costs of £1.4m (2014: £2.5m)

o A non-cash impairment of goodwill of £9.0m (2014: nil) in the Group`s IVA segment

o Loss before tax of £5.7m (2014: profit before tax of £3.4m) after amortisation and impairment of acquired intangible assets, unwinding of the discount on contingent consideration and exceptional items

Legal Services now accounts for the majority of Group revenues

o The Legal Services segment, which was only established in June 2014, was responsible for 58% of the Group's revenue (2014: 31%) and represents 67% of the Group`s revenue on a pro forma basis

o Acquisition in August 2015 of the trade and assets of Colemans-CTTS LLP and CT  Support Services Limited ("Colemans"), a consumer legal services business

Debt solutions businesses continued to be profitable on an adjusted basis and cash generative

o Continued difficult market conditions anticipated for debt solutions resulted in non-cash impairment of goodwill in the IVA segment

A strong balance sheet, significant cash generation and long term bank facilities provide platform for further growth

o Net cash generated from operating activities (after deducting cash cost of exceptional items) of £7.9m (2014: £5.7m)

o Net debt of £13.6m at 31 December 2015 (31 December 2014: £7.6m), following cash investment of £11.0m on acquisitions (including related expenses) during the year

Increased proposed final dividend reflecting strong financial performance and the Board`s confidence in the future

Final dividend proposed of 4.35p (2014: 4.10p), making a total dividend for the year of 6.80p (2014: 6.40p), an overall increase of 6%

Significant growth opportunities expected in the legal services segment during 2016

o Having integrated two significant legal services acquisitions, the Group now has considerable capability to deliver a wide range of consumer legal services

o Further growth anticipated in legal services both organically and through acquisition

Loss before tax of £5.65m (2014: profit of £3.45m) plus amortisation of acquired intangible assets of £4.78m (2014: £3.27m), impairment of goodwill of £9.01m (2014: nil), unwinding of the discount on contingent consideration of £0.88m (2014: nil) and exceptional items of £1.44m (2014: £2.53m). This therefore reflects a non-statutory measure.

Chris Moat, Chief Executive Officer, said:

"2015 was a significant year for Fairpoint as we continued our expansion into the legal services market, reporting strong growth in revenues and adjusted profits and completing the acquisition of Colemans to add market leading expertise in volume personal injury, conveyancing and travel law to the Group's existing legal services offering."

"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."

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