RBG Holdings PLC on Monday said its litigation finance subsidiary LionFish Litigation Finance Ltd will not meet trading expectations for the full year in 2022.
The London-based professional services company said LionFish recently lost two cases it invested in. Further, following a review, RBG Holdings decided that any further appeals on these cases are no longer viable, and LionFish will now have a non-cash write-off of £4 million in 2022.
The actual cash loss associated with these cases amount to £1.1 million over the life of the investment, RBG Holdings added.
As a result, LionFish will not meet the company’s previous expectations of £2.3 million profit.
The group now expects adjusted earnings before interest, taxes, depreciation, and amortisation to be between £11 million to £12 million, which is down from an Ebitda of £13.8 million last year.
Chief Executive Nicola Foulston said: ‘I am very disappointed with the LionFish position. We are taking steps to address the ongoing exposure to this subsidiary. We will also look at the efficiency of the cost base so that in 2023 we continue to deliver strong cash generation and good yield.’
Shares in RBG Holdings were down 23% to 64.31 pence at midday on Monday in London.
Meanwhile, RBG Holdings’s professional services businesses RBG Legal Services Ltd is on track to exceed full-year expectations.
In addition, RBG Holdings said that Convex Capital Ltd had a ‘robust performance year-to-date, despite the market headwinds’.
Convex has some transactions which are now expected to complete in the first quarter of 2023, with deferment of revenue into the new financial year, it added.
RBG Holdings said it plans to announce a second interim dividend for the twelve months to December 31.
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