Rosenblatt: £1m for extra two-year lock-in
Two listed legal businesses have unveiled positive trading updates, with the founder of City firm Rosenblatt to receive £1m in return for extending his lock-in with the business.
Rosenblatt told investors that it expected its 2019 results to be in line with market expectations and thus “significantly ahead” of 2018.
It said the “steady performance” of its primary practice areas, which are focused on contentious work, has allowed the firm to increase the amount of conditional fee work it takes on to £2m.
While the corporate division saw reduced billings “due to the impact of the cautious business environment caused by Brexit uncertainty”, the decisive election result has improved client confidence and “the group is beginning to see a significant increase in the number of transactions the division is working on.
Last September, Rosenblatt announced its first acquisition as a listed business – and begun diversifying away from legal services – by spending up to £22m on a specialist sell-side corporate finance boutique, Convex Capital.
The update said: “Convex has a significant pipeline of transactions, and the group expects to increasingly benefit from capturing Convex’s legal spend within Rosenblatt, as well as future cross-selling opportunities.”
Rosenblatt has used some of the money it raised from listing to set up a litigation finance arm. It currently has £2.2m invested in 11 cases which are yet to conclude, of which, £1.9m was invested in 2019.
It has seen the first successful completion of a case invested in since the listing, delivering a return, in terms of cash and time, of 184%, with an internal rate of return of 317%, although the actual sums were “not material” in terms of the forecast full-year financial results for 2020.
The group has negotiated a two-year extension and broadening of the restrictive covenants put in place with founder Ian Rosenblatt, through to 2023. He will receive a one-off payment of £1m in return.
Keith Hamill OBE, meanwhile, has taken over from Stephen Davidson as the new chairman of the group.
He is currently a non-executive director of Samsonite and chairman of Horsforth Holdings Group, a private company providing outsourced leisure services.
He was also the pro-chancellor and president of the council Nottingham University. Earlier in his career, he was chief financial officer of Forte and WH Smith, as well as a partner at PwC.
Meanwhile, Anexo Group, the listed credit hire and legal services provider, today described 2019 as “a year of strong progress”, with profits set to be in line with market expectations.
“This reflects the continued expansion of the group’s legal services division and the consequent increase in cash collection.”
It has continued to recruit more staff to its law firm, Liverpool-based Bond Turner, doubling the office space in its relatively new Bolton office, and it set to open a further office in Leeds by the end of March.
“The Leeds office will initially be staffed by existing senior employees relocating from Bolton. This new regional office will offer excellent opportunities for the recruitment of further staff and the group expects its headcount within Bond Turner to continue to expand.”
Our annual review of the performance of listed legal businesses showed that both Rosenblatt and Anexo had a strong year in 2019.
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