FTI Consulting Q1 strategic comms revenue grows 4.4 per cent

FTI Consulting has reported a 4.4 per cent rise in revenue on a constant currency basis in its strategic communications arm in the first quarter of 2015.

FTI CEO Steven Gunby: Agency is "building a solid foundation for sustainable growth"
FTI CEO Steven Gunby: Agency is "building a solid foundation for sustainable growth"

Adjusted EBITDA in the division more than doubled, from $2.7m (£1.8m) to $5.8m (£3.8m), driven by a mix of higher margin activities and reduced staff costs, FTI said.

The agency said underlying revenue growth was primarily due to growth in project-based revenues in EMEA and Asia Pacific.

Including the impact of exchange rates, revenue in the division fell 2.5 per cent.

Edward Reilly, global CEO of the strategic comms arm, told PRWeek: "In this quarter the UK and Asia has really led in terms of the performance."

He said the performance in the US, its biggest single market, was affected by the continued "re-engineering" of the American operation, for example by existing some lower-margin businesses and investing in its social and digital capabilities.

Reilly said FTI’s focus was organic growth rather than acquisitions.

Across the company, revenue rose 1.6 per cent to $432.3m (£281.5m) in the three months to 31 March.

Adjusted underlying earnings (EBITDA) increased by 14.6 per cent to $58.7m (£38.2m), with adjusted earnings per share up from $0.45 to $0.57.

Revenue growth was led by a 13 per cent increase to $106.2m (£69.2m) in the corporate finance/restructuring division, driven by "higher demand" for bankruptcy restructuring and non-distressed service offerings in North America and transaction advisory services in EMEA.

These helped adjusted EBITDA in the division to almost double in the quarter, from $11m (£7.2m) to $22.5m (£14.7m). The performance was partially offset by lower restructuring activity in Australia.

Revenue in the forensic and litigation consulting segment increased 1.5 per cent to $123.3m (£80.3m). Higher expenses including staffing, travel and marketing saw adjusted EBITDA in the division fall from $26.5m (£17.3m) to $22.1m (£14.4m).

In the economic consulting division, revenue fell 0.7 per cent to $106.1m (£70m), with a 2.5 per cent negative impact from foreign currency translation largely offset by a 1.9 per cent positive impact from acquisitions. The division’s adjusted EBITDA fell from $13m (£8.5m) to $11.6m (£7.6m).

Revenue in the technology segment fell nine per cent to $54.7m (£35.6m), primarily due to a decline in large complex global investigation work and lower consulting and services revenues, FTI said.

Adjusted underlying earnings in the division slid from $17.3m (£11.3m) to $10.1m (£6.6m), linked to lower average prices achieved on consulting and services revenues, higher research and development expenses, and increased investments in global services delivery, marketing and business development.

Steven Gunby, FTI president and CEO, said: "We are pleased with our earnings per share of $0.57 even though the earnings reflect, in part, some one-time benefits and a slow start to investments.

"What is most gratifying and important is the ongoing progress in our key change initiatives — most visibly this quarter in our corporate finance/restructuring and strategic communications businesses — but in fact, across all of our business segments, as these initiatives are building a solid foundation for sustainable growth."

FTI has a target to reduce its dependence on capital markets. It aims to make the business split evenly between financial comms, corporate comms and public affairs by the end of 2016.

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