Shares in listed legal service group RBG Holdings have dropped by over 90 per cent over the last year and hit an all time low on Friday.
And after these declines, analysts have wanted the company’s “current situation looks bleak”.
RBG Holdings group
RBG has two law firms under its umbrella: dispute-focused Rosenblatt and commercial advice specialised in Memery Crystal.
The company has struggled to earn a profit since its listing in May 2018 and losses have only accelerated over the past year.
In May, the firm said it had lost more than £11m last year, while revenue dipped by nearly 13 per cent.
Over the last year, the RBG’s share price has dropped by nearly 91 per cent. Its shares were trading at 18.50p last November but have since plummeted, hitting its lowest level last Friday at 1.55p.
The group listed on the London Stock Exchange in May 2018, trading at 131p, and hit its highest price on 2 July 2021, at 160p.
Now, the legal business is trading well under 2p.
“A perilous state”
Dan Coatsworth, investment analyst at AJ Bell stated that “RBG looks to be in a perilous state”, adding that “it is losing money, and the balance sheet looks very weak.”
“Worth a minuscule £2.2m, it’s hard to imagine that RBG can justify keeping its AIM listing given the tiny market value of the business unless trading radically improves,” he explained.
It was reported last month that founder Ian Rosenblatt was demanding the removal of chief executive Jon Divers following the drop in the company’s share price.
Sky News revealed Rosenblatt had written to the chairman of RBG Holdings to demand the removal of Divers, who joined the company in 2022. He threatened to call an extraordinary meeting of its shareholders unless Divers was sacked.
Coatsworth pointed out that “a lot is riding on the turnaround efforts and the company was remarkably upbeat in its financial results, despite issuing a profit warning.”
Rosenblatt still owns more than 20 per cent of RBG’s stock, and according to its shareholder reports, the level of directors remuneration paid out over 2023 was to the tune of £3.6m, which included over £2m to Rosenblatt personally.
The group made headlines last year after a scandal engulfed when the former CEO Nicola Foulston was accused of making a racist comment at a dinner party.
The group dismissed her, and she sued for wrongful dismissal. The group revealed last October that it had settled its case with Foulston for £500,000.
The Employment Tribunal has since cleared Foulston and RBG of a racial discrimination claim made by a former partner.
“RBG needs to show clear evidence of better trading soon otherwise it may disappear from the quoted spotlight,” Coatsworth added.
RBG Holdings was contacted for a comment.
