March 13, 2024 • Insight
PPHC Announces Full Year Results for 2023
Unaudited Preliminary results for the year ended 31 December 2023
Record financial performance and excellent strategic progress with acquisitions deepening geographic reach and policy expertise
Public Policy Holding Company, Inc., the government relations and public affairs group providing clients with a fully integrated and comprehensive range of services, is pleased to announce its unaudited full year results for the year ended 31 December 2023.
Financial Highlights
- Revenue increased 24.1% to a record $135.0m (2022: $108.8m), growing by 2.0% organically, displaying the inherent strength of the Group through the economic cycle
- Underlying EBITDA rose by 12.4% to $35.1m (2022: $31.2m), in line with market expectations and achieved at a margin of 26.0%, within the Group’s target range of between 25% and 30%
- Underlying Net Income increased by 13.9% to $26.5m (2022: $23.3m)
- Balance sheet remains strong with cash generated from operations of $21.6m and a year-end net cash position of $3.4m, comprising $14.3m cash offset by outstanding debt of $10.9m, reflecting very low leverage levels and positioning the Group well to deliver further value accretive M&A
- Declaration of a final dividend of $0.097 per Common Outstanding Share, taking the total dividend for 2023 to $0.143 per share, representing an increase of 2% year-on-year and in line with the Group’s dividend policy
Operational Highlights
- Excellent strategic progress, sustaining and organically growing the core offering in challenging markets while pursuing successful, value accretive acquisitions to broaden services and geographic reach
- Ended 2023 as the #1 federal lobbying agency in the US1, with the Group’s federal lobbying firms collectively reporting $68.3m of disclosed revenue
- Successful acquisition of MultiState Associates, Inc. (“MultiState” or “MultiState Associates”) on 1 March 2023, proving the attractiveness of the holding company proposition to unlock growth and value
- Multistate delivered a strong full-year performance, contributing healthily to Group revenue and EBITDA
- All business segments achieved year-on-year growth, demonstrating the strength and breadth of the Group’s services
- Improved client diversification, with the top 10 Group clients representing 8.8% of total revenue, down from 9.6% in 2022 and reflecting sustained progress from 2021, when the top 10 represented 13.1%
- The Group ended 2023 with c.1,200 total clients, compared c.850 in 2022. The current client roster includes 137 Fortune 500 clients and related trade associations, while directly serving 44 Fortune 100 clients
- Number of clients spending $100k or greater per year was 468, a year-on-year increase of 23%
- The growth of clients spending $100k or greater demonstrates the Group is successfully cross selling its services with multiple operating companies advising on specific policy areas and specialisms
- Launched Concordant Advisory, the Group’s first organically developed offering, in November 2023 to enhance cross-selling between operating companies and geographies and better support clients with strategic communications challenges, for which public policy is paramount for their growth
- Continued focus on people, with the lowest employee attrition rates on record, while adding key talent in specialist areas including AI, aerospace and defence, technology and energy transformation. These sector specialisms are central to today’s broader policy agenda
- Number of employees as at 31 December 2023 totalled 333, up from 244 as at 31 December 2022
1Source: 2023 Lobbying Disclosure Act
Current trading and Outlook
- Current year-to-date trading is promising, and the Group continues to grow organically, supported by new client wins across sectors, including RTX Corporation (formerly Raytheon Technologies), Phillips 66, Nuclear Innovation Alliance, Dynavax Technologies and Fight Colorectal Cancer
- In the medium term the Group expects organic revenue growth, on average, to be between 5% and 10%, supplemented by growth from M&A
- The Group continues to target an Underlying EBITDA margin of between 25% and 30%
- Pipeline of strategic and accretive acquisition opportunities in the US and Europe remains strong, as the Group looks to broaden its market position in federal and state advocacy, as well as in the adjacent strategic communications and public affairs markets
Stewart Hall, CEO, commented:
“PPHC has performed extremely well in what have undoubtedly been some of the toughest macro conditions we have seen since our inception ten years ago. In 2023, the unpredictability of politics – not just in the US but globally – was mixed with increased interest rates and broader macro-uncertainty. It is therefore testament to our broad offering and operating companies that our clients are ever-increasingly relying on our support in navigating these difficult times.
“The increasing demand for our services has enabled us to generate solid levels of organic growth and healthy expansion in total client numbers. Strategically, we are progressing well with a healthy pipeline of value accretive acquisition opportunities and the strength of our holding company model being validated by the outperformance of our two most recent acquisitions.
“While global uncertainty persists in 2024, we are extremely well positioned to capitalise on what continues to be a positive trajectory for our wider markets. We therefore look forward with a high degree of confidence in our people, operations, expertise and ability to continue to deliver profitable growth in the years ahead.”