Year end trading update

RNS Number : 1910Z

Begbies Traynor Group PLC

20 May 2021

 

20 May 2021

Begbies Traynor Group plc 

Year end trading update

Results expected to be comfortably ahead of market expectations

Begbies Traynor Group plc (the 'company' or the 'group'), the business recovery, financial advisory and property services consultancy, announces an update on trading for its financial year ended 30 April 2021.

Summary

· Results expected to be comfortably ahead of market expectations* and prior year following a strong performance in the fourth quarter:

o  Revenue** expected to be c.£83.7m (2020: £70.5m)

o  Adjusted PBT** expected to be c.£11.5m (2020: £9.2m)

· Represents a further year of growth in both revenue and profitability with continued margin enhancement

· Strong trading performance in the final quarter across both operating divisions

· Four acquisitions completed in 2021 - three in the financial year and one at the start of the new year - significantly increasing the scale of the group and its capabilities

o  all performing in line with expectations and integration projects proceeding well

· Strong operating cash flow in the final quarter with net cash** of £3.0m at 30 April 2021*** (2020: net debt of £2.8m) - significantly better than expectations

* current range of analyst forecasts for revenue of £77.1m-£78.5m and adjusted PBT of £10.5m-£11.1m

** all numbers in this statement subject to audit

*** net cash at 30 April 2021 is prior to the acquisition of MAF Property Limited which was completed post year end

Divisional performance

Business recovery and financial advisory

· Good financial performance with segmental revenue growth of c.20% with continued improvement in margins

o  Insolvency maintained revenue run rate in H2 on an organic basis, despite suppressed market activity levels

o  Advisory had a strong H2 performance due to corporate finance completions

o  Recently acquired businesses - CVR Global ("CVR") in January 2021 and David Rubin & Partners ("DRP") in March 2021 - performing well

· Integration projects on target: CVR fully integrated and DRP integration to be completed in the new financial year

· Several high-profile appointments secured in the period: Football Index, Brooks Brothers and Ralph & Russo

· Insolvency market continued to be suppressed due to government financial support measures and temporary legislation changes

o  Corporate insolvencies decreased by 34% in the year ended 31 March 2021* to 11,081 (2020: 16,840)

*Source: The Insolvency Service quarterly statistics on the number of corporate insolvencies (excluding compulsory liquidations) in England and Wales on a seasonally adjusted basis.

Property advisory and transactional services

· Strong financial performance in the final quarter leading to better than expected outcome for the year

· Segmental revenue growth of c.15% with profits broadly maintained despite significant impact of first lockdown in Q1

· Activity and transaction levels recovered to pre-lockdown norms in Q4 - no adverse impact from second or third lockdowns

· London based HNG business (acquired in January 2021) trading well and in line with expectations

Liquidity

· Strong financial position with a net cash balance of £3.0m at 30 April 2021 (2020: net debt of £2.8m)

o  Includes the effect of the placing in March 2021 and CVR, DRP and HNG acquisitions

· Significant headroom in bank facilities* to fund organic investment and further acquisition opportunities

* Facilities comprise a £25m unsecured, committed revolving credit facility which expires in 2023, together with a £5m uncommitted acquisition facility

Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:

"We expect our results for the full year will be comfortably ahead of market expectations.  This will represent another year of growth in revenue and profits, whilst investing in the group to expand the range and depth of our service lines.

"This strong financial performance is despite the impact of a suppressed insolvency market and the lockdown at the start of the financial year. Our transactional businesses have bounced back strongly, our organic investments have made good progress and we continue to believe that the number of insolvencies will increase as the government support measures are removed.

"The four acquisitions we have completed since the beginning of 2021 have significantly increased the scale of the group and its capabilities, enhancing the support and advice we provide to UK businesses, and leaving us well-placed to service the expected increase in the number of insolvencies.

"With the benefit of these recent acquisitions and our organic growth opportunities, the group is well positioned to deliver the anticipated material growth in earnings in the new financial year."

Enquiries please contact:

Begbies Traynor Group plc   0161 837 1700

Ric Traynor - Executive Chairman

Nick Taylor - Group Finance Director

Canaccord Genuity Limited       020 7523 4588

(Nominated Adviser and Joint Broker)

Emma Gabriel / Angelos Vlatakis

Shore Capital                                                                                          020 7408 4090

(Joint Broker)

Mark Percy / Anita Ghanekar / James Thomas

MHP Communications       020 3128 8168

Reg Hoare / Katie Hunt / Florence Mayo                                        [e-mail]  

Information on Begbies Traynor Group can be accessed via the group's website at
www.begbies-traynorgroup.com/investor-relations

 

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