Begbies Share News (BEG)

(Sharecast News) - Business consultancy Begbies Traynor reported revenue growth of 11% in its half-year results on Tuesday, to £37.5m.
The AIM-traded firm said it saw a first-time contribution from acquisitions in the prior year, as well as "robust" organic performance in the six months ended 31 October, giving it enhanced operating margins of 14.6%, rising from 13.2% year-on-year.

It reported "strong" adjusted profit growth of 25% to £5m, while its statutory profit before tax fell to £0.5m from £1.9m, which the board said reflected increased non-cash acquisition accounting charges.

Begbies Traynor said all areas of the group performed well, with business recovery and financial advisory seeing good returns from acquisitions and organic investment, including the recruitment of senior fee earners.

In property advisory and transactional services, the board reported a recovery in performance from service lines that had been impacted by the Covid-19 lockdown in the spring.

The directors declared an interim dividend of 1p - an increase of 11% - building on the increases of the previous three years.

It said it maintained a "strong" financial position, as it swung to net cash of £0.7m from net debt of £2.3m, with "significant" levels of headroom within its committed bank facilities, enabling investment in organic and acquisition opportunities.

Looking at the impact of Covid-19, Begbies Traynor said it had successfully absorbed both the downside impact of lockdown in the first few months of the financial year, and a subdued insolvency market resulting from the Government's financial support measures.

It said its business recovery and financial advisory teams had worked remotely, and were still being appointed on and progressing cases, realising assets and completing transactions as usual.

The majority of property advisory and transactional services teams also worked remotely, after the spring lockdown paused some activities in that division temporarily.

Its board said the company experienced no significant impact, or a change to its response, during the November lockdown in England.

On its current trading, Begbies Traynor said its business recovery and financial advisory divisions were "strongly" positioned, with an increased order book of committed future insolvency revenue.

It also reported that an increase in market insolvency levels were expected once short-term support measures for the economy were removed.

Property advisory and transactional services were continuing to recover, with the company expecting to maintain its current levels of performance despite the "challenging" environment.

Begbies Traynor said its results for the full year were expected to be at least in line with current market consensus for profit before tax of £9.8m, which would represent a further year of growth.

"Despite the challenges of lockdowns this year, and a subdued insolvency market, we expect our results for the full year will be at least in line with the current market consensus, which would represent a further year of growth," said executive chairman Ric Traynor.

"With the benefit of our strong financial position we continue to look for opportunities to develop and enhance the group, both organically and through selective acquisitions, and we remain confident in our outlook for the current and future years."

Begbies Traynor said it would issue a trading update for the third quarter in March.

At 1136 GMT, shares in Begbies Traynor were down 5.57% at 88.2p.