Begbies Traynor
Ticker: BEG Exchange: AIM

Begbies Traynor Group plc is an AIM-listed professional services consultancy delivering solutions for businesses, financial institutions and professional advisers in the areas of corporate recovery, restructuring and turnaround, corporate finance, forensic accounting, investigations and security risk.

The Group serves its clients via an extensive UK office network and through an international association of approved partner firms which enables it to draw together specialist teams from around the world to meet specific cross-jurisdictional challenges.

Latest deal enhances revenues and relationships

The latest acquisition, Midlands based finance broker MAF Property Limited (trades as MAF Finance Group) should add new dimensions to BEG’s business portfolio. It builds potential to grow more cyclical, financial advisory and property services operations, as well as to enhance trusted working relationships and higher profiles with banks and other secured lenders. The latter groups being a potential source of referrals for BEG’s insolvency arm.

The transaction should immediately enhance earnings, even though the payment terms are more back-end loaded than recent BEG acquisitions. Maximum potential consideration is £11.75m: £3m up front (£2m cash and 0.848m new shares), £8.75m deferred, subject to delivery of material profit growth over the next four years. Those terms reflect MAF management’s ambitious growth plans, which BEG fully supports.

Our figures incorporate a £0.5m contribution to BEG operating profit this year (to end April 2022), with ongoing potential for loan book growth to offset short-term investment related earnings drag as the business builds up. We still believe that supports a fair value of 165p / share, equivalent to a 18x FY22e PER and a 1.9% prospective yield (2.8x covered by adjusted earnings).

BEG Acquisition May 21


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