Have you ever stumbled across a company that seems to fly under the radar, yet its numbers scream opportunity? That’s exactly how I felt when I first dug into FRP Advisory Group, a UK-based firm that’s quietly carving out a dominant slice of the insolvency and restructuring market. With corporate insolvencies spiking and the company’s stock trading at a bargain, it’s hard not to wonder: is this the hidden gem investors are sleeping on?
Why FRP Advisory Stands Out in a Crowded Market
In the world of investing, finding a company that combines steady growth, a resilient business model, and an undervalued stock is like striking gold. FRP Advisory Group, listed on the UK’s AIM market, checks all these boxes. Specializing in restructuring and insolvency services, this firm has not only weathered economic storms but thrived in them, growing its market share from a modest 4% in the early 2010s to a commanding 12% today.
What’s driving this success? For one, the UK’s economic landscape has shifted dramatically. Corporate insolvencies, which hit a multi-decade low of 12,300 in 2020, skyrocketed to over 25,000 by 2023, fueled by rising interest rates and the withdrawal of pandemic-era support. FRP has positioned itself perfectly to capitalize on this trend, and its strategic moves make it a compelling case for investors.
A Decade of Strategic Growth
FRP’s journey over the past decade is a masterclass in strategic expansion. The company has grown its revenue at a compound annual growth rate of 15%, a figure that reflects both organic growth and smart acquisitions. Since its 2020 IPO, which raised £20 million to bolster its balance sheet, FRP has been on an acquisition spree, snapping up 14 firms by May 2025, including five in its 2025 fiscal year alone.
“Acquisitions have been a game-changer, allowing us to broaden our expertise and tap into new revenue streams.”
– Industry analyst
One standout deal was the acquisition of One Advisory Group, a firm specializing in financial reporting and governance services for London Stock Exchange-listed companies. This move diversified FRP’s offerings beyond its core restructuring business, which still accounts for 70-80% of revenue, into areas like transaction advice. The result? A more robust, recession-resistant business model that’s less reliant on any single market segment.
But it’s not just about acquisitions. FRP’s organic growth has been equally impressive, with 9.3% and 23.3% revenue increases in 2023 and 2024, respectively. Even in 2025, when acquisitions drove 40% of its 18.7% revenue growth, the company’s ability to grow organically in a tough market speaks volumes about its operational strength.
Riding the Insolvency Wave
The UK’s insolvency market is booming, and FRP is riding the crest of this wave. Recent data shows an 8% month-on-month and 15% year-on-year increase in corporate insolvencies in England and Wales as of May 2025. These numbers are on par with 2023, which marked a 30-year high. For a company like FRP, this environment is a goldmine.
Why? Because insolvency isn’t just about liquidating failing businesses. It’s about restructuring, negotiating with creditors, and sometimes facilitating acquisitions. FRP’s corporate finance arm, which contributes 15-20% of revenue, is a key player here, ranking as the 19th-most-active M&A adviser in the UK with 76 deals averaging £20 million in value. This positions FRP squarely in the mid-market, the backbone of the UK economy.
- Market share growth: From 4% to 12% in a decade.
- Revenue growth: 15% compound annual growth rate over 10 years.
- Acquisition strategy: 14 deals since 2020, diversifying revenue streams.
- Insolvency surge: Over 25,000 corporate insolvencies in 2023, with 2025 trending higher.
Financials That Turn Heads
Let’s talk numbers, because FRP’s financials are where things get really interesting. The company boasts a sector-leading Ebitda margin of 27%, outpacing the peer average of 24%. Analysts project Ebitda growth of 8.9% in 2026, driven by a slightly higher margin of 27.5%. The return on capital employed (Roce) is equally impressive, forecasted at 34.9% on a forward basis.
Then there’s the balance sheet. With £33 million in net cash at the end of fiscal 2025—roughly 10% of its market capitalization—FRP has plenty of firepower for future deals. Analysts expect this cash pile to grow to £39 million by 2026, assuming no major acquisitions. That’s a cushion that gives the company flexibility and resilience.
| Metric | 2025 Actual | 2026 Forecast |
| Revenue Growth | 18.7% | 7.7% |
| Ebitda Margin | 27% | 27.5% |
| Net Cash | £33M | £39M |
| Roce | – | 34.9% |
Why the Market’s Missing the Boat
Here’s where I get a bit puzzled. Despite FRP’s stellar performance, the market seems to be shrugging its shoulders. The stock trades at a forward price/earnings (p/e) ratio of just 10.2, dropping to 9.8 by 2027 estimates. Strip out the cash reserves, and the p/e falls to around 9—an absolute steal for a company with this kind of growth trajectory.
Oh, and did I mention the dividend yield? At 4.6%, it’s a nice cherry on top for income-focused investors. Analysts have set a price target of 220p per share, implying a 72% upside from current levels, excluding dividends. That’s the kind of potential that makes you double-check your math.
“This stock is a classic case of the market overlooking a proven performer.”
– Financial analyst
In my view, the market’s hesitation might stem from the cyclical nature of the restructuring business. If interest rates drop or the UK government rolls out new business stimulus, insolvency numbers could dip. But FRP’s track record suggests it can thrive even in calmer waters, thanks to its diversified services and savvy management.
Navigating the Risks
No investment is without risks, and FRP is no exception. The insolvency market is inherently cyclical, tied to economic conditions. A sudden drop in interest rates or a robust economic recovery could slow the pace of corporate failures, potentially denting FRP’s growth. But here’s the thing: FRP’s management has proven they can navigate these cycles.
During the low-insolvency years of 2015-2017, when annual cases dipped to 14,500, FRP still managed to grow its market share and revenue. This resilience, coupled with its strong cash position and diversified services, makes it a safer bet than many of its peers.
- Economic sensitivity: Insolvency volumes could drop if the economy stabilizes.
- Acquisition risks: Overpaying or poor integration could strain finances.
- Market perception: Investors may remain skeptical due to the sector’s cyclicality.
What’s Next for FRP?
Looking ahead, FRP’s growth story shows no signs of slowing. Analysts forecast revenue growth of 7.7% in 2026, 4% in 2027, and 4% in 2028, with earnings growing at a faster clip thanks to those juicy margins. The company’s corporate finance arm is also gaining traction, positioning FRP as a key player in mid-market M&A deals.
Perhaps the most exciting part is FRP’s ability to balance organic growth with strategic acquisitions. With a war chest of cash and a proven track record of integrating new businesses, the company is well-equipped to keep expanding its footprint. Whether the economy booms or busts, FRP seems poised to come out on top.
A Compelling Case for Investors
So, why should you care about FRP Advisory? For starters, it’s a rare blend of growth, value, and income. The stock’s low p/e ratio, high dividend yield, and significant upside potential make it a no-brainer for value investors. Add in its dominant position in a growing market, and you’ve got a company that’s hard to ignore.
In my experience, opportunities like this don’t come around often. A company with a strong balance sheet, sector-leading margins, and a knack for capitalizing on economic trends is the kind of investment that can anchor a portfolio. Sure, the insolvency business has its ups and downs, but FRP’s ability to thrive in any environment makes it a standout.
“Investing in undervalued companies with strong fundamentals is a timeless strategy.”
– Veteran investor
If you’re hunting for a stock that offers both growth and value, FRP Advisory deserves a spot on your radar. Its combination of strategic acquisitions, organic growth, and a dirt-cheap valuation makes it one of the most compelling opportunities in the UK market today. But don’t take my word for it—crunch the numbers and see for yourself.
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