RBG Holdings PLC (AIM:RBGP), the legal and professional services firm, saw its shares nosedive 23% to 64p on Monday after issuing a profit warning.
The company said it has lost two cases in its litigation subsidiary LionFish, which resulted in a non-cash write-off of £4mln, meaning the group will miss previous expectations of £2.3mln profit.
RBG said it now expects adjusted underlying earnings (EBITDA) to be materially behind market consensus expectations for 2022 and in the range of £11mln to £12mln.
"I am very disappointed with the LionFish position. We are taking steps to address the ongoing exposure to this subsidiary. We will also look at the efficiency of the cost base so that in 2023 we continue to deliver strong cash generation and good yield,” said RBG chief executive Nicola Foulston in a statement.
However, the company said its professional services arm had put in a robust performance in the year so far despite market headwinds.
Additionally, the group said it plans to announce a second interim dividend for the year to 31 December 2022, in line with its policy of distributing up to 60% of retained profits.