It's difficult to account for the 11 per cent share price fall which greeted Begbies Traynor 's (BEG) full-year results. Headline numbers were in line with market forecasts and included a handy 25 per cent increase in adjusted pre-tax profits to £4.5m, improved management of working capital and a better-than-expected year-end debt position. Perhaps investors were hoping management would boldly call the bottom of the long declining corporate insolvency market, amid the newly heightened prospect of a UK recession.
As it was, there was no mention of Brexit in a tentative outlook undoubtedly mindful of the 9 per cent decline in national insolvency appointments in the year. But Begbies management thinks there will be an uptick and is already experiencing a growth in enquiries, if not formal appointments, amid the economic fallout from the EU vote. "Whether it's a technical recession or a slowdown, I think we will see an increase [in insolvencies] post-Brexit," executive chairman Ric Traynor told us. "I can't see that it can be any other way - it'll affect demand and the ability of distressed businesses to access funding."
Shore Capital expects adjusted pre-tax profits of £4.9m in the current financial year, giving EPS of 3.34p, up from £4.5m and 3.19p in the 12 months to April 2016.
BEGBIES TRAYNOR (BEG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 46p | MARKET VALUE: | £49m | |
| TOUCH: | 46-49p | 12-MONTH HIGH: | 54p | LOW: 39p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 154 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 17% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 57.7 | 5.5 | 4.4 | 2.2 |
| 2013 | 51.1 | 2.4 | 1.6 | 2.2 |
| 2014 | 44.1 | 4.3 | 3.7 | 2.2 |
| 2015 | 45.4 | -0.7 | -0.6 | 2.2 |
| 2016 | 50.1 | 0.6 | 0.3 | 2.2 |
| % change | +11 | - | - | - |
Ex-div: 6 Oct Payment: 4 Nov *Includes intangible assets of £58.4m, or 55p a share | ||||
