LONDON (Alliance News) - Business recovery and property services firm Begbies Traynor Group PLC on Tuesday said it turned to profit in its recently completed financial year, boosted by its property services unit, while its insolvency and restructuring practice faced a softer backdrop.
Begbies said it made a GBP600,000 pretax profit in the year to April 30, swung from a GBP700,000 loss the year earlier, mainly due to one-off costs booked the year prior not repeating.
Revenue rose to GBP50.1 million from GBP45.4 million, driven by a strong performance in the firm's growing property services division. Taylors Business Surveyors & Valuers, which it acquired in late 2015, has been successfully integrated and contributed to the results, and Begbies said the synergy targets from Eddisons, the property services consultancy Begbies bought in late 2014, exceeded its expectations.
Further growth from property services is expected in the current financial year after the group bought Pugh & Co, the largest commercial property auctioneer in the UK outside of London, in June.
The company's insolvency and restructuring practice, however, was hit by a decline in insolvencies in the UK over the course of the year, though Begbies said it managed to maintain operating margins through strict cost controls.
Begbies declared a final dividend of 1.6 pence, flat year-on-year, with its total payout also flat at 2.2p.
"Last year was one of solid progress for the group with results in line with market expectations and growth in both revenue and profits; this reflected the benefit of the investment in our property services division, which now represents 25% of the group's activities," said Ric Traynor, executive chairman of Begbies Traynor.
"Although we remain cautious about activity levels in our counter-cyclical activities in both business recovery and property services in the near term, the recent acquisition of the Pugh auction business, together with the Taylors valuation business, gives the opportunity for growth in earnings in the new financial year," he added.
Still, Begbies said the insolvency market remains difficult to predict, and though activity levels have stabilised, market volumes are at the lowest since 2004, leaving the company cautious on the outlook.
Begbies shares were down 14% to 46.25p early Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Begbies (BEG)