FTI Consulting books double-digit growth in first quarter of 2018

09 May 2018 Authored by Consultancy.uk

A more than 11% ramping up of revenues, led by Corporate Finance and Restructuring service lines, has seen global management consultancy FTI Consulting report a record first quarter result in 2018.

FTI Consulting has announced double-digit growth in its first quarter revenues. The firm’s assorted service lines grew its revenues to a combined $497.8 million in 2018, an increase of $51.4 million, or 11.5%, on last year’s opening quarter.

Commenting on these results, Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, said, “Our record first quarter results, together with our strong second half of 2017, reflect the enormous efforts our leaders and professionals have made in listening to our clients and investing heavily to deliver on core client needs. Though quarters will always have some volatility, the overall improvement of our positions over these past several years is gratifying and powerful.”

Revenues in the Corporate Finance & Restructuring segment increased $37.0 million, or 35.0%, to $142.9 million in the quarter compared to $105.9 million in the prior year quarter. FTI’s Corporate Finance and Restructuring practice partners companies, boards of directors, investors, lenders and creditors around the world, focusing on delivering restructuring and business transformation solutions, addressing the full spectrum of financial, operational and transactional risks and opportunities. The firm cited higher demand for restructuring, business transformation and transaction services – exemplified by the collapse of Claire’s as part of the ongoing consumer crunch – as the reason behind its growth in the area. 

Revenue of FTI Consulting

In the Forensic and Litigation Consulting segment, revenues also climbed by double figures, increasing by $16.6 million, or 14.9%, to $128.0 million in the quarter compared to $111.4 million in 2017’s opening. The Forensic and Litigation Consulting practice at FTI provides multidisciplinary, independent dispute advisory, investigative, data acquisition/analysis and forensic accounting services to its global client base, supporting those facing high stakes litigation, arbitration and compliance investigations, and regulatory scrutiny. While the implementation of landmark regulations such as the GDPR are coming to fruition in 2018, the increase in revenues here was primarily driven by increased demand for construction solutions, investigations and health solutions services, according to FTI.

The firm’s Strategic Communications segment recorded a 20.7% year-over-year increase in revenue in the first quarter to $52.8 million, in what consultants at FTI noted as the firm’s best performance in a decade. Formerly Financial Dynamics, FTI’s Strategic Communications wing designs and executes communications strategies for clients managing financial, regulatory and reputational challenges, with approximately 650 expert consultants located in key markets around the world. The segment’s revenue was up 14.1% in the period excluding the impact of foreign currency exchanges, and the firm said this was primarily due to an increase in both project and retainer-based revenues – something which has made the communications and advertising market increasingly attractive to consulting firms.

FTI’s Strategic Communications segment leader Mark McCall said, "In terms of revenue, it’s our best quarter in 10 years at least," while noting that he believed post-electoral public uncertainty had also played a role in the firm’s success. He added, “Clients are seeing that it’s a complex business environment and a transaction isn’t just about communicating to the street [but also] getting regulatory approval… The more you’re coordinated, the better your chances are at completing the transaction."

While the results do mark a notable shift in the fortunes of FTI on last year, however, there is still room for improvement in two other major consulting lines of the firm. Economic Consulting saw a decreased of $6.1 million, or 4.4%, to $133.1 million in the quarter, compared to $139.2 million in 2017. The Economic Consulting practice is involved in a wide range of engagements relating to to economics, finance and accounting, working to give insight and expert testimony in legal and regulatory proceedings, as well as supporting strategic decision making and public policy debates. The firm blamed this decrease in revenues on lower demand for antitrust services in North America.

Elsewhere, revenues in the Technology segment decreased $5.2 million, or 11.2%, to $40.9 million in the quarter compared to $46.1 million in the first quarter of the last year. Technology consulting is the largest service line in many of the world’s largest management consulting industries – worth £3 billion in the UK alone making this a worrying prospect. According to FTI, the decrease in revenues was primarily due to lower demand for managed review services, which was related to a decline in demand for merger and acquisition-related “second request” services.

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