Strong FY23 and well set for further growth

FY23 results demonstrate how effectively BEG’s diversified professional services base performs across the cycle.

Revenues have more than doubled over the past five years, adjusted PBT is up over three-fold. An 11% y‑o‑y increase in revenues in FY23 was driven by a broadly balanced mix of organic growth and contributions from acquisitions which have built complementary skills and extended geographical reach.

Revenues from non-insolvency work (Advisory and transactional services) now contribute 40% of group revenues and comprise a mix of defensive, counter, and pro-cyclical sources, c 75% of which is derived from recurring sources.

A confident outlook is underpinned by an 80% income weighting towards counter cyclical and defensive activities. The next few years are likely to be busy for BEG’s insolvency operations as the UK faces a challenging economic environment. We also see potential upside from further acquisitions.

We have adjusted 24e EPS for tax rates and issuance, but retain our 175p/share fair value estimate, equivalent to 17.0x FY24 EPS and a 2.3% yield.