Upgrades on back of positive year-end update

We have upgraded our forecasts for the current year to 30 April 2022, post a year-end trading update which anticipates results ‘comfortably ahead of market expectations’. Our upgrades comprise a 3.3% increase in revenue, 4.7% in Adjusted PBT, and reflect a full 12 months’ ownership of the larger acquisitions secured during FY21 and just as important, their successful integration and strong performance during the period. Both divisions produced very positive performances. Revenue from Business Recovery and Financial Advisory was c 35% ahead, and Property Advisory segment revenue was c 19% higher. The group ended FY22 with £4.7m of net cash (FY21: £3.0m), after payment of £7.5m of acquisition and earnouts during the period. 

The core message, worth reiterating, is that BEG’s growth is not predicated on recovery in the UK insolvency market. Its financial advisory and property services consultancy operations are substantial and complementary to its business recovery arm. This update and FY22e upgrades reinforce our view on underlying value and a deserved higher rating for the shares. Prior to detailed results on 19 July, we retain our long-held 165p / share fair value estimate.