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.
BEG’s trading update confirmed a strong first half as all areas of the business benefit from recent acquisitions: this leaves the group well on track to meet our full year forecasts. Reported first half revenue was c £52m (H120: £37.5m), and adjusted PBT c £8m (H120: £5.0m).
The divisional overview confirmed that business recovery and financial advisory benefited from the performance and successful integration of prior year acquisitions. Deal completions drove corporate finance forward and its H2 outlook is underpinned by a strong transaction pipeline. Including contributions from acquisitions, property advisory and transactional services grew revenue and profit y-o-y, trading at normalised levels vs a lockdown impacted comparable period.
We would reiterate that our forecasts do not incorporate the material increase in market insolvency volumes that is typically part of any normal economic cycle. The timing and scale of any pickup has clearly been delayed by the support measures introduced by the UK Government during the pandemic.
Pending the interim results due out on 14 December, our forecasts are left unchanged as is our 165p/share fair value estimate, equivalent to a 18x FY22e PER and a 1.9% prospective yield (2.7x covered by adjusted earnings).
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