Last checked at 21 May 2024 07:00
21 May 2024
Begbies Traynor Group plc
Year end trading update
Notice of full year results
Begbies Traynor Group plc (the 'company' or the 'group'), the professional services consultancy, announces an update on trading for its financial year ended 30 April 2024.
Strong financial performance - ninth successive year of growth in profits
· Revenue expected to increase by c.12% to c.£136m (2023: £121.8m)
· Adjusted EBITDA expected to increase by c.9% to c.£29m (2023: £26.6m), ahead of market expectations**
o Margins improved across both business recovery and property services offset by subdued M&A transactions in corporate finance and investment to support ongoing growth
· Adjusted PBT expected to increase by c.6% to c.£22m (2023: £20.7m), having absorbed increased finance costs
· Net debt lower than anticipated at £1.4m on 30 April 2024 (2023: net cash of £3.0m), demonstrating strong free cash flow, having paid acquisition consideration of £8m and funded £3m of EBT share purchases***
* All numbers in this statement are subject to audit
** Market expectations (as compiled by the company): revenue of £134.0m-£135.2m, adjusted EBITDA £27.7m-£28.4m, adjusted PBT of £21.9m-£22.5m, net debt of £2.0m-£3.2m
*** Employee Benefit Trust (EBT) trading plan as announced on 14 December 2023
Growth across both divisions
· Business recovery and advisory - revenue growth of c.7%
o Business recovery teams had a successful year with c.13% revenue growth
§ Activity levels increased across all case sizes
§ Added capacity to the team through recruitment and acquisition
§ Market leading position maintained (by volume) with national market volumes continuing to increase in current interest rate and inflation environment
o Resilient advisory performance with financing and restructuring engagements mitigating the previously reported reduction in M&A transactions
· Property advisory and transactional services - revenue growth of c.25%
o Strong growth in the year driven by both acquisitions and organic development
o Growth delivered across all core disciplines of valuation, asset sales and consultancy
· Invested in teams to support ongoing growth in the group including:
o Talent development and wellbeing support
o IT and programme management capability
o Third party software applications to automate and improve processes
Value-accretive acquisitions performing well
Four acquisitions completed in the financial year, adding over £9m in pro-forma revenue to the group (in year revenue contribution c£5m):
· Banks Long & Co, a general chartered surveyors practice, based in Lincoln;
· Cardiff-based insolvency team from Jones Giles & Clay, joining the group's existing Cardiff office;
· Andrew Forbes, a property valuation practice based in Bristol; and
· SDL auctions, a national firm of property auctioneers headquartered in Nottingham.
All acquisitions complement the group's current service offerings whilst strengthening our regional presence, with their integration and trading performance in line with expectations.
Strong balance sheet with significant headroom under new debt facility
· Net debt of £1.4m at 30 April 2024 (2023: net cash of £3.0m)
o Reflects better than anticipated cash generation in the final quarter
o Strong free cash flow
o After acquisition consideration of £8m and £3m of EBT share purchases***
· New £35m debt facility agreed with HSBC as announced in February 2024, which replaced the group's previous facility which was due to mature in August 2025. The key terms are:
o £25m committed, unsecured revolving credit facility (unchanged)
o £10m accordion facility (increased from £5m), allowing further debt capacity to support the group's growth strategy
o Overall facility costs broadly in line with the previous facility
Notice of results
The group will report its final results for the year ended 30 April 2024 on Tuesday 9 July 2024. There will be an analyst presentation at 9.00am on the day in London. Please contact begbies@mhpgroup.com if you would like to receive details.
Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:
"We have delivered another strong performance, with EBITDA ahead of market expectations and net debt lower than anticipated. This was driven by increased activity levels in business recovery, which maintained its market-leading position by volume, and very strong growth across our property advisory and transactional services teams.
"The group's cash generation, combined with the significant headroom within our new debt facility, provides us with the flexibility to execute our strategy to continue to grow our scale and range of services both organically and through acquisition.
"We expect business recovery activity levels to remain strong, combined with a recovery in M&A activities and the continued growth across our property services business. We are therefore confident of continuing to build upon our long track record of growth in the current year and beyond."
This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) No 596/2014. The person responsible for arranging the release of this announcement on behalf of Begbies Traynor Group plc is Nick Taylor, its Group Finance Director
Enquiries please contact:
Begbies Traynor Group plc 0161 837 1700
Ric Traynor - Executive Chairman
Nick Taylor - Group Finance Director
Canaccord Genuity Limited 020 7523 8350
(Nominated Adviser and Joint Broker)
Emma Gabriel / Harry Pardoe
Shore Capital 020 7408 4090
(Joint Broker)
Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas
MHP Communications 07827 662831
Reg Hoare / Katie Hunt / Charles Hirst begbies@mhpgroup.com
Information on Begbies Traynor Group can be accessed via the group's website atir.begbies-traynorgroup.com