MIDAS ACTION TIPS: RBG Holdings legal group, led by former Brands Hatch owner Nicky Foulston, has the X factor for your savings
Nicky Foulston was just 18 when his father acquired the Brands Hatch racing circuit. A multimillionaire businessman, John Foulston had developed a love for motorsports and wanted to save the Kent-based site from being turned into a housing estate by property developers.
A year later, in 1987, Foulston died in a high-speed crash at Silverstone and his daughter became the eyes and ears of his family on the track, ensuring that managers were pursuing the strategy his father would have wanted.
A fallout with management ensued within months and, at the age of 22, Nicky borrowed £ 6million and took control of Brands Hatch. It was 1990, Foulston was a phenomenal success for the company and in 1999 it was sold for 195 million dollars (140 million pounds sterling).
Well judged: RBG helped second-from-right Simon Cowell buy out X Factor and Britain’s Got Talent
Today, she is the Managing Director of a totally different company, the listed legal group RBG Holdings. Foulston helped bring RBG to the London Stock Exchange junior AIM market in 2018 at a price of 90 pence. The shares now stand at £ 1.35 and are expected to rise significantly in value over the next few years.
Foulston, a 12 percent shareholder, is also a strong supporter of dividends, so the payouts are expected to become more and more generous, even as the business grows.
RBG started out as Rosenblatt Ltd, a highly regarded law firm founded by Ian Rosenblatt, a lawyer who first met Foulston upon his father’s death. Soon after becoming a client, Foulston kept in touch with Rosenblatt. In 2016, he asked her to help him make his business look less like a corporation and more like a business.
Since then, RBG has become more efficient in the way it invoices for work and fees are collected from customers faster, resulting in significantly higher profits. There have also been some high profile cases. Only last year did he act for Simon Cowell when he managed to secure full ownership of Britain’s Got Talent and X Factor.
RBG has been booming since going public, acquiring corporate finance boutique Convex Capital in 2019 and prestigious law firm Memery Crystal two months ago.
Foulston also started a litigation finance company, LionFish, run by former investment banker Tets Ishikawa, a specialist in the field.
Litigation Funding focuses on lending money to businesses or individuals so that they can fight litigation. Funding providers then receive a share of the proceeds if their customers win. It’s a growing field, but LionFish is designed to be different from its peers, offering more agile pricing, more flexible funding structures, and faster turnaround times.
Having started in May of last year, the company has already received more than 250 requests for funding. Several cases have been accepted and success is expected to translate into significant returns, which may well translate into special dividends for shareholders.
Brokers are bullish on RBG, even ruling out potential returns from LionFish. The Memery Crystal transaction has been well received by large investors and is expected to drive growth this year and beyond, especially as Foulston and his team help the company become more profitable.
Convex Capital advises entrepreneurs when looking to sell their business and it was hit hard by the Covid-19 pandemic last year. However, the business has rebounded in recent months and dozens of deals are underway.
Analysts expect RBG to see a 78% increase in revenue to £ 46million this year, with profits up 57% to just over £ 9million.
A dividend of 4.75p has been forecast for 2021, rising to 6.6p next year, with strong growth expected thereafter.
Midas Verdict: Nicky Foulston is clever, ambitious and determined to repeat the success she had with Brands Hatch in her youth. Progress to date has been encouraging, but the best is almost certainly yet to come. At £ 1.35, stocks are a buy and rising dividends are another draw.
Negotiated on: GOAL Teleprinter: RBGP Contact: rbgholdings.co.uk or 020 7955 0880