The owner of listed firm Rosenblatt has sacked its chief executive after indicating that profits are likely to have nosedived in the last year. In a statement to the London Stock Exchange this morning, RBG Holdings said it had ‘lost confidence’ in Nicola Foulston and terminated her contract with immediate effect. The announcement added that the decision was made ‘as a result of cultural concerns and the execution of the group’s strategy’.
Rosenblatt appointed Foulston as chief executive in 2016, before going public. Foulston had previously turned the motor sport promoter Brands Hatch Leisure plc from a business worth £6m to one sold for more than $195m in less than 10 years.
She oversaw rapid growth of Rosenblatt’s income following listing, which included the acquisition of London firm Memery Crystal, but the company’s fortunes took a turn for the worse in December, when it warned of a £4m hit from the loss of two cases financed by its litigation funding subsidiary LionFish.
Shares in the company dropped from 83.5p to 67p following the warning. The price fell almost 11% today to 59p – the lowest price recorded since March 2020.
In a trading update for the year ended 31 December 2022, RBG braced investors to expect a 32% fall in pre-tax profits, to £6.9m. Revenues are expected to have risen slightly, to £49.5m. RBG said its profits ‘were expected to be line with consensus market expectations’ and that its balance sheet remained strong.
The company said: ‘Overall, the group continues to benefit from its diversified portfolio of legal and professional services businesses, reducing overall volatility of earnings.
‘RBG Legal Services, which comprises Rosenblatt and Memery Crystal, had a good year building on a solid 2021 financial year. In the second half of the year, strong demand was seen for its contentious legal offer which offset slower demand for its corporate offer as a result of the continued economic uncertainty; this resulted in fewer transactions, including M&A.’
LionFish, meanwhile, is scaling back its funding commitments. Potential offers for the business 'are now being evaluated', the update said.
Marianne Ismail, non-executive director, said: ‘As previously announced, our decision to refocus on our core legal and professional services businesses will ensure we can build on our strong position in this sector.
‘We are working to reduce our exposure to the ongoing funding commitments of LionFish in a way that benefits shareholders and this will free up capital and management resource to focus on the significant opportunities we see to grow our core businesses. We are looking forward to the next 12 months with renewed optimism.’
Current chief operating officer Jon Diver will take over as acting chief executive. Tania MacLeod and Nick Davis have been appointed as executive directors.
