Another reassuringly good Q1 trading update

BTG Consulting’s diversified mix of business services has delivered good Q127 growth, in-line with management’s expectations. As such, management is confident in delivering FY27E market expectations for c.7% revenue growth and a c.15% Adj. PBT margin.

The restructuring business continues to benefit from the tough macro-economic situation with a good flow of new instructions and no sign of that changing given BTG’s Q2 26 Red Flag Report shows a 9% year-on-year increase in the numbers of businesses in “critical” financial distress.

Consumer-facing industries are facing some of the highest increases and the recent rise in fuel prices – up 10p in the past month – will put consumers under even more pressure. Meanwhile the Advisory business has benefited from the completion of some transactions delayed from H226 and the real estate business has also grown.

In our view, BTG offers profitable organic growth, a strong balance sheet and free cashflow for both acquisitions and dividends, which justifies a rerating. We reiterate our fair value per share of 170p, equating to a 6% cal 2027 FCF yield and 14x cal 2027 PER, in-line with historic trading averages.