Good morning and welcome to the FRP Advisory Group PLC interim results investor presentation. Throughout this recorded meeting, investors will be in listen-only mode. Questions are encouraged. Questions can be submitted at any time using the Q&A tab situated in the right-hand corner of your screen. Just click Q&A, type in your question, and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I would now like to hand you over to Geoff Rowley, CEO. Good morning, sir.
Good morning. Thank you. Welcome to those who are online and also for those who have joined us in person this morning for our interim results for the first half to 31st of October 2024. To my left, I have Jeremy French, our Chief Operating Officer. To my right, I have Gavin Jones, our Chief Financial Officer. If I can start by reconfirming our value proposition, that is, the FRP is a specialist advisory firm delivering services through five core pillars with a strong track record of profitable growth. Our strategy centers on organic growth bolstered by strategic acquisitions, all underpinned by a collaborative, entrepreneurial, and meritocratic culture. Amidst increasing market activity and demand for advisory services, our client base is diversified across geography and sectors and continues to expand. The business has an experienced management team, a growing reputation, increasing profitability, and strong cash generation.
In terms of our specialist services to support clients through the corporate life cycle, we have Corporate Finance and Debt Advisory, and during the period under review, we've continued to invest in both external and internal talent. We expanded our geographical footprint in the period with the acquisitions of Lexington Corporate Finance in Cardiff and WilliamsAli in Newcastle. Both businesses will trade as FRP Corporate Finance. Earlier in the first half, we also acquired the Hilton-Baird Group, which sits within the Debt Advisory pillar. Based in Southampton, it operates nationally and provides commercial finance and commercial finance brokerage, outsource risk and receivables audit, as well as credit management and commercial debt collection services. A key client group is asset-based lenders. Trading for Hilton-Baird is as expected. Moving into H2 of 2025, the pipeline of new opportunities remains solid as uncertainty moderates and sentiment stabilizes following the budget.
We continue to see good levels of activity with signs of an increase in debt refinancing and restructuring-related M&A activity. Financial Advisory anticipation of the new government's budget drove an increase in activity in the transaction services market, which FRP's Financial Advisory pillar was well placed to support. This principally resulted in an increase in buy-side financial due diligence mandates, business valuations, and pre-lending mandates. Financial Advisory continues to support cross-pillar initiatives and increase its national coverage. The valuation team doubled following the Globalview acquisition in October 2024, and FRP now offers a broader range of valuation services to clients. Forensic Services. The Forensic Service market has been relatively buoyant in the period, especially in litigation, contentious, and solvency-related matters. The group has continued to expand its service offering by bolstering the team, including the hire of a Forensic Service Partner in our new Belfast office. Restructuring Advisory.
The first half began well with the completion of a number of notable projects, including The Body Shop. The U.K. general election in July 2024 was followed by a three-month period of economic stagnation in the U.K., with uncertainty in advance of the new government's budget delaying decision-making. During this pre-budget period, there was a spike in the number of solvent liquidations. The increase in employers' national insurance contributions announced in the recent budget is likely to put further pressure on businesses with large workforces and lower margins. The retail and hospitality sectors, in particular, which were already navigating post-COVID debt service and other inflationary cost pressures, are expected to face additional financial challenges. In terms of our current national coverage, we're now up to a team of 105 partners, a total team of 777 excluding consultants across 33 offices.
And as mentioned earlier, we're now in Cardiff, Belfast, and a second office in Newcastle. We continue to be active members of Eight International, and there's some good initiatives taking place there. Likewise, with the Insitute for Turnaround, the BVCA, and the Alliance of International Corporate Advisers as regards our Corporate Finance business. Passing over to Gavin.
Thanks, Geoff. So in terms of our financial highlights, we have the pleasure of reporting a strong set of results. These are all in line with the mid-November trading update, and they are unaudited. Revenue growth was 32% year-on-year, of which 23% was organic. The profit metric that we invite you to judge us upon, which is Adjusted EBITDA, grew 44% year-on-year. On an annual basis, given that we do specialist high-margin advice, we always say on an annual basis, we aim for a high 20s margin. We had a stronger H1 than previous half years, and the margin was 29%. So we're very pleased with that. We have a strong balance sheet with net cash of GBP 13.3 million, bearing in mind we've used cash to fund four acquisitions, for example, in the first half.
We also drew GBP 7.2 million on revolving facility just to match the cash generated from the acquisition to the payback. It's structured to the terminal. In terms of Adjusted EPS, that grew year-on-year at 42%, and in line with our quarterly progressive dividend policy, our interim dividends are up 6% year-on-year, and as part of these results, we're announcing a Q2 interim dividend of GBP 0.95, which takes the half total to GBP 1.9. In terms of this graph, many of you will have seen this before who see us regularly. From our perspective, we think it just demonstrates how FRP has a track record of resilient growth regardless of the economic conditions, both revenue and profits. In terms of the operational highlights, as we alluded to earlier on, there were four acquisitions in the half, and Jeremy will give more detail on those later on.
In terms of the team, our people are our greatest asset. Both demand-led lateral hiring, acquired colleagues led to a 25% team growth year-on-year. We also have good levels of retention as a function of our collaborative, friendly corporate culture that we work hard to retain despite growing. We also have a lot of initiatives in place regarding colleague well-being. In terms of utilization, 69%, which is the highest level since IPO. The team has been busier, but we do have capacity because that is based on a seven-and-a-half-hour workday. In terms of the administration appointments, we were the leading administration appointment taker again. We've been the leading administration appointment for many, many years, but from our perspective, we are also busy on many confidential advisory projects that are not part of those formal appointment stats. Geoff, to your cross-pillar activity.
So as you'll have heard us say on a number of occasions, we see one of our core strengths as making sure that we have collaboration across our service lines and that we are not running a business where we have a silo approach to how we service our clients, and we're pleased to put forward here a number of projects where we have more than one service line, making sure that we are delivering for the client's needs. A fairly obvious one on there is The Body Shop, which was a close integration actually between Corporate Finance, Restructuring Advisory, and there is an omission here because our forensics team was also heavily involved in various matters of what had gone before, and again, that was also serviced across many different offices. So a very, very good example of collaboration across the business. Again, there's a project round there.
Actually, that one there, related following a cyber attack. I saw this weekend the former CEO was actually in a media interview referencing how the cyber attack had fundamentally destroyed their business and taken it out of their control, so slightly interesting projects in terms of how that played through, but we continue to really try and drive home the importance of that collaboration, and we do see that as a differentiator in terms of how FRP goes to market and serves its clients and succeeds.
A quick run-through on some of the stats for H1. Restructuring market activity. Looking at liquidations, not administrations, but liquidations alone, 10,000 in the half. That's 11% down year-on-year. We took 488, so you're 2% down. But actually, that moved our market share from 4% to 5% in that arena. We shouldn't lose sight of the fact that there's an awful lot of those 10,000 that are very low or indeed no fee cases. So you have to be selective in that regard. There was also not shown, but there was an awful lot of solvent liquidations in September and October ahead of the budget, which are they're predominantly tax planning process. We did pick up a lot, but they're lower fee modules of work, so not material to the numbers. When we turn to administrations, there was only 791 in the first six months, down 7%.
600 a year is back down to about 2017 levels with considerable inactivity from the 2010 through to 2020s. We were actually 42% down on administrations. We still took more than any other firm, but we did have two very large groups, so two situations with many groups within the corporate model in H1 of last year. So our market share, which suggests, is 12%, which is down from 15% the year before. Those numbers do not include restructuring plans, which is a Companies Act activity as opposed to an Insolvency Act activity. And nor does it include the larger advisory projects that we involve ourselves in, which hopefully lead to no formal process and no stat originating from the goodwill that's put into the larger cases.
On our acquisitions, we've mentioned before, but we've reconfirmed we stick with an organic growth strategy, but to acquire small partner teams, it's got to be a cultural fit. Strategic fit, we want all of our service lines to be joined up across the place, and then economic fit. They're all structured with retention similar to IPO partner lock-ins, and all of the four listed were all in the form of shares and an element of cash. Hilton-Baird in Southampton added four partners and 36 colleagues. You've already heard that it's Debt Advisory. It certainly deepens our relationships with our asset-based lender clients. Its services include commercial finance brokerage, ABL ledger audit. We're not straining to audit for audit's sake, and commercial debt collections. Clients include independent lenders, banks, SME, and corporate businesses, as well as most other insolvency practitioners will use Hilton-Baird's services.
Lexington in Cardiff was one partner with 14 colleagues. Corporate Finance, Wales, has been a target of FRP for quite a long time. We do feel we really do now have the opportunity to add in additional service lines to what we can offer across our first Welsh office. WilliamsAli in Newcastle, two partners and five colleagues. Corporate Finance enables the group to increase market share, broaden its services in the locality, and it complements the existing strong presence in the North East in the target region for the expansion of our Corporate Finance offering. Most recently, Globalview, London-based, one partner and eight colleagues, falls within Financial Advisory, allows us to significantly increase our market share and broaden our valuation service offering to clients. That valuation work does extend to the restructuring plans that we get involved with these days.
We enhance our ability to serve our clients far more effectively. Turning to team growth, the picture is a picture and the words are on the next page. I think I'll focus on the words rather than talking you through the picture, but there's consistency in growth and very good trending on utilization. So on the colleague update page, partners, 105 now, but that remains at 13%-14%, same percentage as last year. And in fact, the whole structure has remained very, very consistent. Fee earners, 66% remains constant, and support colleagues actually moved down from 22% to 21%, 21%. On the 1st of May, we actually took another seven colleagues internally from director to partner. That was part of an overall total of 87 promotions.
Those seven means that over the last two years, we've promoted 22 internal partners, which is why I feel that actually going back to that revenue per partner line, that's 0.7 for the half year, 1.4 for the year. That's a lot of internal partners that are building a portfolio, but the portfolio is the company's existing portfolio. So to actually remain constant at that level with so many good young people coming through into partnership is very reassuring. New talent and evolution. Claire Dale joined us as a new People Director to lead on our people proposition and future talent acquisition, making us an employer of choice. Claire presented the people and talent strategy to the Board in September 2024. Louise Jackson joined, a former group director of talent and leadership at Selfridges.
She joined as a new Non-Exec and Remuneration Committee Chair. Our talent acquisition program and processes, establishing an internal talent acquisition team to lead on our talent mapping and attraction, ensuring that we extend our net as widely as possible during recruitment, and also present our employee brand and value prospects to the market to attract the very best talent that is out there. We continue to have high levels of colleague retention, consistently remaining at 10%, and team growth, there is a very competitive environment out there. We've continued to recruit talented individuals to join FRP and help us grow in targeted areas. Our team grew to 776. Gavin.
Thanks, Jeremy. In terms of the reported P&L, the revenue grew 32% or GBP 19 million year-on-year, as we discussed earlier on. As a people business, the people costs are our largest cost. They grew GBP 10 million year-on-year. We do have share-based payment costs going through the reported P&L. However, year-on-year, they were similar. So it's not a massive difference year-on-year. In terms of the people costs, we have in here colleagues and partners, the fixed pay and variable pay. That GBP 10 million growth year-on-year in terms of personnel costs is both demand-led lateral hiring, plus acquired colleagues, plus salary rises during the year. In terms of operating expenses, there's no big items really to call out other than usual costs of running a business like ours.
We do have some increased property-related costs, even though rent goes through a different line, but in terms of utilities for having extra space. In terms of systems, we spent a little bit, a few hundred thousand GBP in terms of converting our CRM system. We changed from one system to another. We've been doing some upgrades in terms of our HR systems and outsourcing payroll. In terms of the profit metric that we invite you to judge us upon, underlying Adjusted EBITDA, it was up 44% year-on-year, which is a GBP 6.8 million increase. As I mentioned earlier on, those share-based payments year-on-year, GBP 2.5 million this half, GBP 2.3 million the last half, they're similar year-on-year. We've been consistent in terms of what we do and what we don't adjust for.
We treat as an operating cost the employer's NI and any options that vest and any acquisition-related costs because we think they're a real cash cost. We don't adjust for those. In terms of the balance sheet, the group has a strong balance sheet with a net cash position. Some of the callouts are non-current assets grew year-on-year. That would be a mixture between goodwill and intangibles. In terms of the trade and other receivables, there was a slight build in our work in progress over the half. At the full year, I did say we always expect to have a WIP build in our first half. There's normally slightly stronger cash collections in our second half, so completely expected. But from our perspective, this is our net recoverable work in progress. We have a monthly provisioning process where anything that's contingent, we carry at zero.
Whenever there's any doubt over recoverability, we provide for that immediately. In terms of our WIP days, I think the prior half, and you've got to bear in mind our WIP range for our industry is in the four to seven month range, and we are very comfortably within that. The prior half, we were 5.8 months. At year-end, we were around about the five-month mark. We did have a build, so our closing position as of October 2024 was 5.4 months and expected slight build, but comfortably within our range. And we would expect slightly stronger cash collections in our second half. We did have a slight build in terms of our debtors. There's one large item, which is approximately GBP 4 million, which we will collect next week. We control the estate money on that. It was just put on a time deposit to get better interest rates.
But as we administer estate funds, we've got full confidence of collecting that back off the money markets next week. We did draw on our accordion facility for Hilton-Baird, as I mentioned earlier on, just to structure the loan repayments with the cash that comes in from that acquisition. In terms of our cash flow, the biggest item that stands out here is that GBP 15 million build in our trade receivables. That's the build in work in progress, and that's slight build in debtors. From our perspective, that doesn't create any concerns. The WIP was expected to grow slightly. We have stronger cash collections here in the second half. And the large GBP 4 million debtor we will collect next week because we control the estate funds. In terms of our capital allocation, this is as we've published before.
We propose to continue investing in the group to drive organic growth. As Jeremy mentioned earlier on, we've got a very selective approach to acquisitions, making sure that the cultural fit is right, the strategic fit, and the money works on both sides. We have a progressive quarterly dividend policy where we pay three smaller interim dividends and a larger final one. And to the extent that we have other capital available that isn't used on any of the above, we would review what we would do at that point in time. So back to Geoff for the outlook.
Thanks, Gavin. So the outlook for the remainder of FY 2025, FRP is a resilient business with a track record of growth throughout the economic cycle. We have a robust business model, and our five complementary service pillars are available to support clients throughout their entire lifecycle. This breadth of services enables us to help clients review their operating models and adapt or evolve as needed in a fast-changing environment subject to many disruptive and economic pressures. Trading in the first half included a strong contribution from The Body Shop and a large Corporate Finance project. And each service pillar has a robust pipeline and positive outlook. The Board remains confident of achieving current market expectations for the full year, assuming current activity levels continue. We will now move to Q&A.
Fantastic. Thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions just using the Q&A tab situated on the right-hand corner of your screen. But just while the team take a few moments to review those questions submitted today, I'd like to remind you of the recording of the presentation along with the Q&A can be found on your investor dashboard. Gavin, if I may just perhaps hand over to you. As you can see, we've had a number of questions from investors. If I could just ask you to read them out and I'll pick up from you at the end, that would be great. Thank you.
Thank you very much indeed. Thank you very much for the questions that have come in. The first one, I'll give a first answer and pass over to Geoff to see if he has anything to add. It's around the first half versus the second half. The question is, over the four years since IPO, there's been a strong sort of second half bias in terms of performance. What are the causes of that bias? Was it similar in the years before IPO? From my perspective, I think you do get some activity whereby after the Christmas period, people come back into the full year, come back into the calendar year, and they start to make decisions. You also have some tax deadlines which trigger some activity.
And then also in the year sort of leading up to our financial close in April, we do sort of put an extra sort of pressure on the team to sort of tidy stuff up in terms of housekeeping. But Geoff, from your perspective, the market dynamic, what would you say about the phasing second half versus the first half?
I think there's no particular science to it, but history has shown that there is a level of activity in the second half of our financial year, whether it's in the world of restructuring for people coming back post-Christmas and making decisions as to what they want to do as regards their businesses. And then again, because our financial year-end tends to fall around the tax year position, you'll often see transactions, particularly in Corporate Finance, where people are working towards that broad timetable. But there's no sort of empirical evidence that we can set out clearly, but it is just history has indicated that there is a slight uptick.
Thank you. So the next one, the question came early on in terms of how do you look to manage the work in progress and conversion to cash before we'd actually got to the balance sheet section, but just to repeat a few of the key points there, we have a monthly robust process where all managers and partners review the work in progress and make adjustments as necessary, so from our perspective, whenever there's any doubts over recoverability, we provision immediately. Anything that's contingent, for example, asset realizations where there's a percentage or any Corporate Finance projects, we carry at zero, so there's a very prudent valuation in terms of our work in progress, and we would regard our work in progress on our balance sheet as the net recoverable WIP that we would expect to at least convert one for one into cash.
The next point, in terms of sustainability of growth, we would sort of invite you to look at our track record and the graph that I showed earlier on. And just for your background, this entire presentation and indeed our interim results are available for you to review on our website in the investor section. But we've got a strong record of growth, which is primarily historically organic growth pre-IPO. In terms of the results just reported, I would say there was a little bit of benefit from The Body Shop project and the larger Corporate Finance project, but somewhere between 15% plus might be the sustainable organic level in those results. But from our perspective, we would invite you to look at our track record of sustainable organic growth. And we don't see any reason why that can't necessarily continue.
The next point, in terms of the four acquisitions in the half, how are they progressing and what can we expect contribution-wise? I think they are all progressing either as expected or slightly better than expected. From a contribution perspective, we put out RNSs at the time of doing those acquisitions. We put in an annualized revenue contribution and an annualized Adjusted EBITDA contribution. Just to skim through those for you, and this is all available in the regulatory news sections of our website. Lexington, which is the Corporate Finance business in Cardiff, we expected GBP 2.7 million of revenue, GBP 0.7 million of Adjusted EBITDA. Hilton-Baird, GBP 5.2 million contribution of revenue, GBP 1.4 million contribution of Adjusted EBITDA. Globalview, GBP 2.7 million of revenue, GBP 1.1 million of Adjusted EBITDA. All of those numbers are on an annualized basis.
So it will depend exactly when we acquired them in the year in terms of how that falls into the future years. The other acquisition was the WilliamsAli one that was slightly smaller. And therefore, we did not disclose the financials of that in the RNS. So I won't mention that to you today. And then the last question, I'll probably hand over to Jeremy in terms of share of voice. In terms of our operational gearing and in terms of the drop-through in terms of profit, in terms of our sort of leverage model, Jeremy, how would you best describe the drop-through to profit?
The drop-through to profit, so we have our WIP adjusted revenues, which gives us our top line. We obviously have our direct costs and our establishment costs, and sadly, these days, a lot of compliance and regulatory costs. But we charge across the partners within the LLP at their base profit level, their quasi-salary level into our salary charge. And we arrive at an operating profit after all expenses, including central and national PLC expenses. We then carve 25% of that operating profit into the LLP for the bonus structure for partners. And the bottom line that investors see is 75% of our effective profitability.
Thank you, Jeremy. So I think that I would summarize that as that we've got good leverage. And there is sort of an element of performance-related pay, as Jeremy mentioned, both with partners and with colleagues. In terms of our support costs, they're not quite fixed. So there's an element of a semi-fixed cost there. But we've got a very strong drop-through from revenue down to profit. So those are all the questions that came through on the system.
Fantastic. Gavin, thank you very much indeed for running through all the questions. And thank you to the team for taking them all. Just before we redirect investors to suppliers and their feedback, Geoff, can I just ask you just perhaps for a few closing comments?
Yes. Well, firstly, obviously, thank you for people making time this morning. I know we're pretty close to Christmas now, but hopefully, the presentation was of some use. And obviously, I'll summarize by saying we are very pleased with the overall results achieved in H1. As always, we know there's much more to be achieved, and we continue to remain focused. But we go into H2, or as we already are now into H2, with a good level of positivity about continuing to deliver. So I hope everyone has a wonderful Christmas and New Year, and we look forward to engaging again in 2025.
Geoff, thank you very much. And thank you to Gavin and Jeremy also. Could I please ask investors not to close the session? You should be automatically redirected to provide your feedback in order the team can better understand your views and expectations. This will only take a few moments to complete, and it is greatly valued by the company. On behalf of the management team of FRP Advisory Group PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good morning to you all.