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Rosenblatt battles Brexit uncertainty in post-IPO financials as it launches litigation funder

In its first financial results since the £43m IPO in May, Rosenblatt has recorded a slight uptick in revenue and profit as it simultaneously launched its own litigation funding arm.

For the first eight weeks of its listed life, Rosenblatt generated £3m in revenue, compared to £2.6m for a two month average in the last financial year. EBITDA edged up from £0.9m to £1m on the same metric while profit before tax was also marginally up: from £0.8m to £0.95m.

The moderate uptick is however boosted by the firm’s cash position, which stands at £11.8m. Rosenblatt also boasted a strong balance sheet of net assets worth £32.7m.

Rosenblatt chief executive Nicola Foulston (pictured) told Legal Business: ‘I’m particularly pleased with the performance of our disputes and employment teams, but we are less happy with corporate. This is partly due to them [the corporate team] assisting with the IPO process itself and uncertainty around Brexit. We’ve seen businesses hesitate and a lot of M&A deals are being diverged.’

When the listing was announced, Foulston also outlined the firm’s intention to set up a third-party funder within ‘the next couple of years’, but the firm announced today (18 September) that it had launched the arm called Rosenblatt Litigation Funding Ltd. With that move only taking around four months, it would seem that the decision to accelerate the plans was influenced by the proposed listing of Vannin Capital, a major player in the litigation funding market.

Vannin announced earlier this month that it planned to issue £70m of new shares in a float expected to take place in October, and appointed Allen & Overy’s former senior partner David Morley as part of the ambitious plan.

However Foulston dismissed such claims: ‘It’s nice to be quoted in the same sentence as Vannin! As a result of the IPO and the publicity we have received we have seen litigation activity increase much faster than we expected so that came with a need to provide third party funding.’

She added: ‘I was quite keen to see us move into this market as litigation funding is becoming too slow, the decisions on big cases take ages to come through. We see perfectly good cases running out of time all as a result of funding not being secured.’

Foulston stated that Rosenblatt would target smaller, mid-tier disputes, and said the funding arm had already picked up an arbitration case which had a £5m funding requirement.

Acquisitions are also on Rosenblatt’s agenda, as Foulston commented: ‘I would be disappointed if we don’t make any acquisitions in the next 12 months.’

Despite these ambitions, Rosenblatt has suffered the departure of finance director Patrick Firebrace, who today joined VWV as director of finance. Firebrace played a key role in Rosenblatt’s listing earlier this year.

Currently, the record for largest UK law firm float is held by Knights, with the Staffordshire-based firm announcing a £50m IPO in June.