Last December, Begbies Traynor’s (BEG) executive chairman was sufficiently cheered to say the insolvency group was “in its strongest position for many years”. Eight months on, that position has “moved forward” (as opposed to sideways), although a robust set of full-year results reflected Ric Traynor’s initial observation in several ways.
For one, net debt is now at its lowest absolute level in more than a decade, while the dividend is up for the first time since 2011. Adjusted earnings per share also beat analyst forecasts, and contributions from acquired businesses helped boost headline operating cash flow by 35 per cent to £7.5m.
Offsetting this was £1.9m spent on acquisitions, although the terms of March’s £2.75m purchase of corporate finance group Springboard resulted in a gain of £0.8m. That’s partly because Springboard's management asked for half their payment in Begbies shares, rather than the 10-20 per cent equity portion seen in past bolt-on deals. The request was no doubt driven by the 13 per cent rise in corporate insolvencies in the first three months of 2018.
Canaccord expects adjusted pre-tax profit of £6.4m and EPS of 3.9p in the year to April 2019.
| BEGBIES TRAYNOR (BEG) | ||||
| ORD PRICE: | 69p | MARKET VALUE: | £77m | |
| TOUCH: | 68.2-71p | 12-MONTH HIGH: | 77p | LOW: 50p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 53 | |
| NET ASSET VALUE: | 53.6p* | NET DEBT: | 13% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 44.1 | 4.3 | 3.7 | 2.2 |
| 2015 | 45.4 | -0.7 | -0.6 | 2.2 |
| 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 |
| % change | +6 | +258 | +550 | +9 |
| Ex-div: | 11 Oct | |||
| Payment: | 8 Nov | |||
| *Includes intangible assets of £59.1m, or 53.5p a share | ||||
