Positive Q3, forecasts on track

BEG’s positive third quarter update (to end January 2023) was another confirmation of the inherent resilience of a broad services offering which includes business recovery, financial advisory, and property services consultancy. The detail included continuing good levels of new insolvency work, particularly administrations, and market share appears to be building. 

The overview is encouraging. Business recovery & financial advisory trade in line with expectations as this division works through a good pipeline of engagements. Property advisory & transactional services division is also performing well and in line with expectations. It is supported by resilient income streams and a continuing flow of new instructions. 

Recent UK Insolvency Services data tracks growth in the market overall and we note that numbers flattened out somewhat over the last couple of months and administrations remain below historic levels. That broadly matches our view and the assumptions for our forecasts, which anticipated a long haul rather than a rapid recovery. 

BEG’s Q3 financial performance was in line with the first half and the outlook is unchanged. The statement expressed confidence regarding delivery of full year market expectations and on that basis we have maintained our full year forecasts. Our existing 175p/share fair value is fully underpinned by the outlook for organic growth.