While insolvency practitioner Begbies Traynor (BEG) might seem a natural hedge against the economic strain weighing on most businesses, it was not entirely immune from the disruption caused by the pandemic. Lockdown prevented commercial property valuations and hindered business agency sales for the property advisory division, which reported flat organic revenue on the prior year.
However, an increase in insolvency appointments meant organic revenue for its core business recovery and financial advisory business rose 8 per cent. However, while insolvency numbers across the UK continued to increase up until the outbreak of Covid-19, the number of corporate insolvencies has dropped since lockdown was implemented.
That reduction can be explained by factors including reduced HM Courts & Tribunals Service operations and HMRC reducing their enforcement activity, said executive chairman Ric Traynor, but it is likely there will be a "spike" in activity when government support rolls off. "It's probably going to be the fourth quarter of the calendar year that we'll see any marked increase," he said.
House broker Shore Capital forecasts an adjusted pre-tax profit of £10.5m and EPS of 6.5p for the year to April 2021, rising to £12.4m and 7.7p the following year.
| BEGBIES TRAYNOR (BEG) | ||||
| ORD PRICE: | 97.8p | MARKET VALUE: | £ 125m | |
| TOUCH: | 97.6-99.8p | 12-MONTH HIGH: | 117p | LOW: 57p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 140 | |
| NET ASSET VALUE: | 51p* | NET DEBT: | 17% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 50.1 | 0.9 | 0.4 | 2,.2 |
| 2017 | 49.7 | 0.6 | 0.2 | 2.2 |
| 2018 | 52.4 | 2.3 | 1.3 | 2.4 |
| 2019 (restated) | 60.1 | 3.3 | 2.0 | 2.6 |
| 2020 | 70.5 | 2.9 | 0.7 | 2.8 |
| % change | +17 | -12 | -65 | +8 |
| Ex-div: | 08 Oct | |||
| Payment: | 05 Nov | |||
| *Includes intangible assets of £59.4m, or 46p a share | ||||
