The latest results statement from Fletchers Group is positive, with a milestone revenue figure reached this year;
Fletchers Group CFO Alex Lynch has heralded an outstanding year for Fletchers, after the Group met the growth milestones of £100 million of turnover and 1,000 colleagues during this financial year.
In its FY results for 2023/24, Fletchers has reported FY24 revenues increasing by 36 per cent to £58m (2023: £43m), and operating profit growing by £6.0m to £9.1 (2023: £3.1m).
Alex also signalled an emerging opportunity for private equity investment in the legal market. She said the success of the Group, which successfully refinanced with Pemberton and NatWest earlier this year, will attract other investors to law firms looking to participate in consolidation and help firms build scale in what has historically been a disaggregated sector.
Highlights include:
· Personal injury revenues grew by 14 per cent
· PI case signings soared 87 per cent – underlining the additional value accruing from the Blume acquisition
· 22 per cent increase in clinical negligence revenues, from case numbers and higher value claims. Over half of new cases have damages estimated at > £25K
· Two acquisitions included Emsleys and Serious Injury Law (SIL). SIL’s contribution won’t appear in the accounts until FY2025. The next deal is due to be announced imminently.
She said: “These results demonstrate the impressive growth and revenue opportunities that are available to firms who can invest in consolidation like Fletchers.”
“Our approach of driving organic growth through our own marketing and recruitment, while also investing in dedicated teams to warmly welcome new colleagues that come to us through acquisition, has helped ensure we make the most of our acquisitions. Most importantly, we have been able to retain those people and ensure our existing business also benefits from the capabilities and relationships they bring with them, ”
“In recent years the sector has been underweight in respect of private capital, but I believe injury law is ripe for further consolidation, and as our results indicate, there are attractive returns for investors looking to participate in the consolidation in our industry, post reform.”
“We expect to make another acquisition shortly and our pipeline is as strong as ever; many firms are looking to M&A to secure their long term future, and their current owners want to find a good home for their current staff and of course take some value from what they’ve built over many years.”
Alex explained that AI is a particular opportunity for a business like Fletchers, where a large case load – current and historic – can deliver real insights. She said that Fletchers has recruited a data science team of 10 people (including 5 PHDs) following an annual investment of £1m, and pilot projects are underway in specific tasks such as bills of costs and the pagination of medical reports.
“Utilising AI is only possible with many cases to analyse; as Fletchers has over 14 thousand cases in its WIP it is well positioned to apply this technology. Results so far are promising, and although we are early in the process, we plan to commercialise our AI propositions.”
Commenting on the results, Alex Wyndham, managing director at Sun European Partners LLP, owner of Fletchers, agreed that the investment climate in injury law was “as positive as I can remember.”
“The latest results underline our view that consolidation in this field of civil law is a compelling investment strategy and I’m confident there is further headroom for profitable growth. Alex, Peter Haden (CEO) and the team have had a stellar year and we’re excited about the prospects for Fletchers in 2025.”
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