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An interesting post Alas. I have held these shares around 1 year and still at my entry price. You would think BEG is a buy, but I cant justify it, when FTSE stocks are climbing. I really think there are many better stocks to buy. On Aim there are many far more beaten down than this, offering higher yields and growth potential. On the FTSE, that seems to be where the recovery is. Will BEG be an 'also ran'? As the economy improves, the investment case reduces. I still hold as it is also quite stable and pays a yield.
Until October last year, for the most part the share price for BEG tracked slightly ahead of that for the FTSE 350 index, a measure which I feel is a target to better, which, for the most part, so it did. Since then, the FTSE 350 index has out-performed BEG by a margin that has worsened since mid-January 2023.
A disappointing reflection of the share price for this business whose prospects as business casualties are increasing should be improving. The market can and does get things wrong. Perhaps it is right now having been wrong in the past. I do not like to average down, but I am sorely tempted at this lacklustre price. The managers are not exactly falling over themselves to buy shares to provide any lead and I feel there is no compelling reason other than to wait and see.
Begbies Traynor Executive Chairman, Ric Traynor and Group Finance Director Nick Taylor present final results for the year ended 30 April 2023.
Watch the video here: https://www.piworld.co.uk/company-videos/begbies-traynor-group-beg-full-year-2023-results-presentation-july-23/
Or listen to the podcast here: https://piworld.podbean.com/e/begbies-traynor-group-beg-full-year-2023-results-presentation-july-23/
I’m not looking to re-rubbish opinion, nor ask for anyones post to be deleted lol.
Ftseexplorer, in anticipation of reasoned debate, the numbers released today are for the benefit of ALL investors. My contention that growth through acquisition is distracting has merit. Just need to look at the contribution that these have provided and the costs incurred in so doing.
The benefit of acquisition is likely to be seen in future years but not, again my opinion, in the current year.
I have found it helpful to rely on facts, so https://www.creditsafe.com/gb/en/blog/reports/insolvencies.html might be of interest as well as the Governments own statistical figures.
Of course, Chelsea11 might wish to put a brave face on things, and simply seek to rubbish my opinion. Doubtless point to the share price chart that does show, since April this year as rising. I would also agree that there is a broad trending rise in the share price over a 3, 5 and 10 year period. BUT over the shorter term of 1 and 2 years, at best it seems to be treading water.
For an accountancy outfit specialising in companies in distress, there has to be some rational reason when facts demonstrate that more and more companies are struggling. As it co-incides with expansion through acquisition of non-core business, I remain of the opinion that it has been a distraction.
What i would say is that the wording of the post you refer to 3 months ago is not ideal but I think there was enough data to allow question marks on acquisition strategy to remain. I remain quizical and am prepared to accept it needs more time. If you look at FRP operating in the same counter cyclical market who haven't spent on acquisition but achieiving similar growth in rev and profitability.
Ftse - so would you say it’s reasoned debate to state little growth / acquisitions are a distraction, well before the company has released updates to the market? Or would you say that is enticing a disagreement?
Chelsea11, I use the platform to read reasoned debate and I see no value in enticing disagreements. These are good results and encouraging but the city don't seem blown away today and we are some way away from recent highs of £1.48 seen in January despite a clearly bearish marketplace. IMV there remains a question mark whether all of the acquisitions are having the synergistic effect they are designed to have.
Turnover growth of 11% of which 6% was organic strikes me that BT are operating with growing tail winds anyway and the £5.36m of turnover generated through acquisition has cost £8.4m (plus on-going amortisation of acqusitions of £6.3m). Time will only tell whether these synergies accelerate but an increase in operating margin of 1% to 17.9% is a good start. I have specific doubts over buying small chartered surveyors as against bringing these on naturally in-house. There is a risk that these individuals are locked in only until they achieve their earnouts and leave to set up again. I also have a gripe at the continued dilution of shares for incentives. I think I would prefer to see BT pull back on acquisitions, focus on execution andwinning new business and using cash flow to share buy backs.
Thanks ED. Coupled with todays RNS, makes a mockery of previous posts here of little growth and acquisitions being a distraction.
FY23 results show ongoing track record of performance across the economic cycle. Revs rose 11% and the dividend 9%, rising for 6 consecutive years. With a confident outlook ED keep a 175p/share fair value.
Read & hear new note from Equity Dev below + you can register for the BEG webinar on 19/7 there too:
https://www.equitydevelopment.co.uk/research/strong-fy23-and-well-set-for-further-growth
Double underlines what was posted here in May. Market expectations exceeded. Significant growth reported, acquisitions helping to fuel that growth, outlook very positive.
Begbies Traynor Group plc (AIM: BEG), the business recovery, financial advisory and property services consultancy, will be conducting an investor presentation covering their final results for the year ended 30 April 2023 and the outlook for the Group.
The presentation will be hosted by Ric Traynor, Executive Chairman, and Nick Taylor, Group Finance Director.
The online event will take place at 12.30pm on Wednesday 19th July, and is open to all existing and potential shareholders.
Questions can be submitted during the presentation to be addressed at the end - you can register to attend on the link below:
https://www.equitydevelopment.co.uk/news-and-events/begbies-traynor-investor-presentation-19july2023
Thanks for reply. Nice average you have.
11% increase in Revs and 16% in Adj PBT simply does not equate to “little growth” and acquisitions are helping to fuel that growth, rather than being a “distraction”. This isn’t just my personal, blinkered view, the Stockopedia extract posted here fully aligns (as do all other related news feeds).
Full results in July should double underline all of this and of course not impossible there could be further company news in the interim.
I don’t follow them as such but it was merely a personal observation. Undoubtedly, Begbies is a more rounded business so if administrations remain below pre-pandemic levels then as I say we should be better placed.
I remain a holder and have an average below £1 so I’m happy to take the yield at the moment and feel my capital is pretty safe.
FRP Share Price is down 30% in the last 6 months.
Am sure you’re aware.
I actually agree with some of Alas_Smith's questions about whether the acquisition strategy is yielding above expected results. The beat today is hardly spectacular given the economic backdrop and I suspect the city agrees.
I subscrive to BSR which shows daily administrations and insolvencies - and although it appears that BT have increased share of both (from 10-11% and 12-13% respectively) I would not say that this is coming through on the BSR service. In fact FRP looks to be winning most new business. Business recover is BT's bread and butter and I would expect should be shoiwng stronger growth.
That said, BT's hedge on the property segment may acually come through if indeed the UK are in for a softer landing than originally forecast at the start of the year.
Well I guess if you’re the type of person who just cannot admit you’ve got something wrong, another way of hiding that is to ask for posts revealing it, to be deleted lol.
Year End Trading Update
Begbies Traynor Group plc (the 'company' or the 'group'), the business recovery, financial advisory and property services consultancy, announces an update on trading for its financial year ended 30 April 2023.
Good news here -
Results expected to be ahead of market expectations
How much ahead of expectations? It’s a modest beat, with adj PBT of £20.7m, vs market expectations of £20.3m (consensus). Well done to the company & its advisers for giving us the precise figures, and market expectations, in the trading update. That’s best practice.
With revenue up 11% to £122m, but adj PBT up a greater percentage, at +16%, this shows an improvement in profit margin, as well as actual profit.
Net cash of £3m, despite having made acquisition-related payments of £11m in the year. Plus it’s paying divis too, of about 3%. So this is a genuinely cash generative business.
Bank facilities sound ample at £30m.
Outlook - the general tone of this update sounds upbeat, and current trading/outlook sounds good, and a reminder that it’s also growing through acquisitions -
"We have started the new year confident in our outlook for a further year of growth. Our insolvency team will benefit from their recent insolvency appointments, together with anticipated further growth in the insolvency market. We continue to identify growth opportunities for our advisory and property teams, including the recently announced acquisition of Banks Long & Co."
Broker update - Equity Development has issued an update note, raising EPS (which is what I use) from 10.0p to 10.5p for FY 4/2023. That means a PER of 12.6x
We can probably expect maybe 11-12p for FY 4/2024, which would lower the PER to 11-12x
Paul’s opinion - at 132p per share, that strikes me as a reasonable valuation, certainly not stretched. Plus divis, and being counter-cyclical, BEG shares are nice to own if you have a negative overall macro view, since insolvencies usually increase when the economy is weak.
Overall then, I can only have a positive view of this share at the current price of 132p. Upside? I imagine 150p+ is possible, with some patience.
Don't forget the backdrop is UK inflation at 10+%
I disagree. The acquisitions are just starting to make some impression to the accounts NOW but should in time benefit shareholders. Mr Market is not exactly fizzed up with todays statement hence the small markup to Fridays close.
It remains in portfolio for time being but I see no compelling reason to increase or reduce my holding.
I think it also firmly puts to bed the debate about whether there is little growth and that acquisitions are a distraction. Precisely the opposite is happening to that posters viewpoint.
Well done Begbies!
Trading update from BEG anticipates FY'23 nicely ahead of Equity Development forecasts: revs seen 11% ahead and adj. PBT +16%.
Outlook for growth is confident which underpins ED's retained 175p / share fair value.
You can read/hear new note here, free access:
https://www.equitydevelopment.co.uk/research/update-shows-fy23-well-ahead-of-forecasts
Results for the y/e 30th April will reveal whether your speculation of “little growth” and that acquisitions are a “distraction”, are proven correct.
Chelsea11, I suggest that the core demand for Begbies is in re-structuring companies (or winding them up) and this does not appear to be much changed from previous years. I accept quote from the statement that you reference to be valid, but MY interpretation of the numbers seems to point to little growth from either acquisition or managed
Of course, I am quite willing to be proved wrong, but pitching for growth through acquisition MIGHT be very beneficial in the medium term (5 years) and beyond. I believe it to be a distraction in the current market