Q4-2020 Trading Update

20 January 2021

Balance sheet significantly strengthened.
Group trading continues to improve steadily in challenging markets

RPS, a leading multi-sector global professional services firm, provides the following trading update for the three months ended 31 December 2020 (‘Q4-2020’), based on a preliminary unaudited summary of Q4-2020 (1).

Q4-2020 Trading Update

Fee Revenue in Q4-2020 was £115.8 million (Q4-2019: £130.3 million; £131.7 million at constant currency), a decline of 12.1% (at constant currency) on Q4-2019. This was a sequential improvement at constant currency with Q3-2020 (£109.0 million) 15.6% below the prior year, Q2-2020 (£107.0 million) 18.1% below the prior year and Q1-2020 (£125.4 million), which had only some early impact of COVID-19, 4.1% below the prior year.

Fee Revenue improved in the quarter as individuals continued to return from furlough and from reduced working hours.  With lockdowns continuing across Europe, we continue to match capacity to market activity while ensuring the safety and welfare of our people.

Strong exposure to government and quasi-government organisations continues to provide some resilience to the impact of COVID-19.  This can be seen in Australia Asia Pacific, which has generated growth in 2020, in Services UK & Netherlands, where Fee Revenue grew in Q4-2020 as the AMP cycle continued to ramp up, and in Norway, which has a significant exposure to government, delivering growth in Q4-2020.

Our Energy segment delivered an improving trajectory in Q4-2020. Consulting UK & Ireland Fee Revenue was broadly unchanged on Q3-2020 despite tougher lockdown restrictions and an increase in people taking annual leave, with the variance to Q4-2019 reduced slightly from Q3-2020.

North America continued to benefit from an improvement in the Environmental Risk business, with strong private equity activity. However, delays in the activation of various Infrastructure projects and higher than usual Thanksgiving and Christmas leave, meant the percentage reduction in Fee Revenue in comparison to Q4-2019 remained in line with Q3-2020.

As a result of the improving fee performance and proactive actions taken in 2020 to manage costs across the Group, draft Adjusted Profit Before Tax is currently expected to be in line with the average of analysts’ forecasts(2).

Market highlights by Segment

Key segment highlights during Q4-2020 are as follows:

  • Energy – continued good progress diversifying into renewables, in particular offshore wind including supporting Ørsted in consenting the world’s largest offshore windfarm – Hornsea III (UK). Work also continued on reshaping the Energy portfolio with the divestment of its small Specialist Geology business to Petrostrat on 31 December 2020
  • Consulting UK & Ireland – working with the UK & Ireland arm of a major blue chip client in the Waste, Energy and Water segment on their Net Zero Carbon strategy and action plan
  • Services UK & Netherlands – AMP7 cycle continues to ramp up with new and extended contracts awarded including the implementation of Waternet, our leakage detection targeting system, for South East Water
  • Norway – secured contracts in renewables and green technology, including supporting Norcem Heidelberg in the building of a carbon capture facility and an agreement to license project management solutions to a Norwegian lithium battery producer
  • North America – strong public sector activity drove awards in both Ocean Science and Texas Infrastructure
  • Australia Asia Pacific (AAP) – secured major transport work in New South Wales, Queensland, and Victoria and the first large transport project in New Zealand. Obtained a substantial contract extension with existing client Star of the South for environmental services to support Australia’s first offshore wind project


Improved debt and liquidity – significantly strengthened balance sheet

Cashflow continues to be well managed with net bank borrowings at 31 December 2020 of £11.4 million (31 December 2019:  £94.1 million; 30 June 2020:  £57.8 million, September 2020: £32.8 million), a reduction of £46.4 million since June 2020, supported in part by the net cash of £19.4 million received from the September 2020 placing.  

The reduction in net bank borrowings in Q4-2020 of £21.4 million was due to continued strong cash management with reducing working capital, ongoing deferral of tax payments under government COVID schemes and a strong focus on driving cash performance.  Lock up day performance was excellent with lock up days at 31 December 2020 exceptionally low at 48 days (31 December 2019: 69 days), due in part to government clients continuing to pay well within terms.

Financial leverage of Net Debt/EBITDA is expected to be in the range of 0.7x to 0.9x at 31 December 2020, compared to the Group’s target range of 1.0x to 2.0x Net Debt/EBITDA.  

The Group continues to have significant liquidity and substantial headroom in respect of the committed bank facilities of £160.0 million at 31 December 2020 in addition to cash at bank of £42.5 million at that date.  At the end of December 2020, the revolving credit facility was undrawn due to the proactive management actions the Group has taken.


Due to the ongoing national lockdown in the UK and wider uncertainty over the timing of recovery in our markets, the Board has taken a prudent approach and decided not to pay a dividend for FY-2020. The Board anticipates resuming the dividend payment for FY-2021 providing markets continue to recover, at which point the Board will assess the appropriate level of dividend.


Q4-2020 saw pleasing signs of continued recovery across RPS.  Despite this encouraging trajectory, we remain cautious due to the uncertain macro-economic climate and the potential for further COVID-19 related restrictions. Consequently, we continue to manage the business tightly with a focus on costs and cash flow management but, without forward visibility of the markets, we are not in a position to provide guidance.

Our strong cash management has delivered reduced debt and leverage. However, debt levels are expected to increase in FY-2021 as growth in Fee Revenue drives an increase in working capital and the tax deferrals continue to be settled.  At the end of December 2020, deferrals for payroll taxes and VAT totaled circa £10.0 million (September 2020: £7.0 million).

The Group has a strong balance sheet and the proceeds from the placing in September 2020 coupled with the significant headroom on our bank facilities are enabling us to protect capability, return to pre-COVID-19 salaries and hours, and return the majority of those on furlough back to work. With financial flexibility to make medium-term decisions on headcount and longer-term investments,  RPS is well positioned to benefit as market conditions improve.

John Douglas, Chief Executive of RPS, commented:

“Our strategic exposure to government sector work is continuing to benefit the Group. Our improved fourth quarter trading performance was in line with our expectations, with some areas of the business pleasingly showing year-on-year growth.

“We continued to make strong progress in significantly reducing net debt and de-risking the balance sheet, providing a strong platform for the year ahead. Management’s continued focus in improving lock up days, combined with the proactive actions and cash management measures taken in response to the pandemic, have contributed to the Group’s improved financial profile.

“Our Q4-2020 performance, along with efforts in the preceding periods, have put RPS in a strong position for when market conditions improve in 2021. We look forward to updating the market further when we report our full year results in early March.”

(1)The Group provides this information based on a preliminary summary of Q4-2020. These figures are yet to undergo full audit review and are therefore subject to change until the 2020 financial statements are finally approved and released in early March 2021.

(2) The Board considers the consensus Adjusted Profit before Tax (PBT) to be the average of existing analysts’ forecasts published in the notes of those analysts who regularly follow the Group. For FY-2020 the Adjusted PBT range is £10.0 million to £17.0 million, with an average of £13.3 million.


This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of RPS Group plc.  These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future.  There are many factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements.  Nothing in this announcement should be construed as a profit forecast.

The above announcement contains inside information for the purpose of Article 7 of the Market Abuse Regulation.



For further information:

John Douglas, Chief Executive Tel: +44 (0) 1235 863 206
Judith Cottrell, Finance Director www.rpsgroup.com
Media enquiries: 
Henry Harrison-Topham / Chris Lane / Tilly AbrahamTel: +44 (0) 20 7466 5000
[email protected]www.buchanan.uk.com




Notes to Editors

Founded in 1970, RPS is a leading global professional services firm of 5,000 consultants and service providers.  Having operated in 125 countries across six continents RPS defines, designs and manages projects that create shared value for a complex, urbanising and resource scarce world.

RPS delivers a broad range of services in six sectors: property, energy, transport, water, defence and government services and resources.  Services provided across RPS' six sectors cover twelve service clusters: project and programme management, design and development, water services, environment, advisory and management consulting, exploration and development, planning and approvals, health, safety and risk, oceans and coastal, laboratories, training and communications, creative & digital services.

RPS stands out for its clients by using its deep expertise to solve problems that matter, making them easy to understand.  Making complex easy.

RPS' London Stock Exchange ticker is RPS.L.  For further information, please visit www.rpsgroup.com.