28 April 2022

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Frenkel Topping seeing the benefit of costs firm acquisitions

The listed company that bought three costs law firms last year has reported strong annual results and hailed their role in helping it create a pre-settlement supply chain in personal injury and clinical negligence.

As part of its ‘buy and build’ strategy, Frenkel Topping spent £9m to acquire Partners in Costs and A&M Bacon in February 2021 and then £1.5m in August on legal aid costs firm Bidwell Henderson.

It said in its 2021 results, published this week, that they were “performing in line with expectations and fully integrated”.

The costs firms contributed to an 80% increase in Frenkel Topping’s 2021 turnover to £18m, with pre-tax profit up the same amount to £2.7m. Assets under management (AUM) grew 16% to nearly £1.2bn.

Chief executive Richard Fraser said: “By acquiring a number of highly complementary businesses that have not only contributed to the financial performance of the group but have given us considerable visibility and significantly enhanced our touchpoints within the personal injury and clinical negligence space, we have developed a market-leading platform from which to offer a greater breadth of services to people who have suffered significant and often life-changing injuries and to their professional representatives.”

Mr Fraser said bringing PIC and A&M into the wider group “has enhanced the company's chances of winning the AUM mandate in the result of a successful claim”.

Bidwell Henderson, he went on, “challenges the traditional legal aid costs firm model and has built its success on developing ancillary services in legal aid processing, legal cashiering and has developed a costs training academy to build the next generation of costs lawyers”.

“As a result, Bidwell Henderson is highly integrated into law firms' back-office systems. Given the close links Bidwell Henderson has to law firms, this represents a clear opportunity for Frenkel Topping to offer its other services such as expert reports in addition to the Court of Protection work and traditional legal costing that both the group and Bidwell Henderson undertake.”

Furthermore, a number of legally aid cases resulted in large awards to claimants, “so Bidwell Henderson offers the prospect of access to additional meaningful opportunities to secure AUM for Frenkel Topping”.

Mr Fraser said the group’s most recent acquisition of Cardinal Management in January was “our most impactful deal to date”.

Cardinal works with some NHS major trauma centres to provide a major trauma signposting partnership support service. He explained: “The acquisition of Cardinal provides a clear and direct link to claimants, and their professional representatives, at the earliest stage possible after injury or illness, introducing the portfolio of Frenkel Topping Group services in a relevant and timely way to its clients in the personal injury and clinical negligence litigation space as well as claimants themselves…

“We are focused on consolidating ownership of the full supply chain in the personal injury and clinical negligence space because we are confident that we can deliver the very best service levels to clients from immediately after injury or illness and for the rest of their lives.”

Frenkel Topping’s shares reached an all-time high of 82p in February. They closed yesterday on 76p.