Begbies Traylor flags earnings above expectations
By Josh White
Date: Tuesday 21 May 2024
(Sharecast News) - Professional services consultancy Begbies Traynor reported a robust financial performance for the year just ended on Tuesday, marking its ninth consecutive year of profit growth.
The AIM-traded company said it expected revenue to have increased by 12% in the 12 months ended 30 April, to £136m, while adjusted EBITDA was projected to rise by around 9% to £29m, exceeding market expectations.
Its adjusted profit before tax was anticipated to be ahead 6% at £22m, despite higher finance costs.
Net debt stood at £1.4m at year-end, down from net cash of £3m at the end of the prior year, demonstrating strong free cash flow after accounting for £8m in acquisition costs and £3m in employee benefit trust (EBT) share purchases.
Growth was seen across both of the group's main divisions.
The board said the business recovery and advisory division saw revenue increase by 7%, with the business recovery teams achieving a 13% rise due to heightened activity across all case sizes.
Its property advisory and transactional services division meanwhile experienced 25% revenue growth, driven by acquisitions and organic development in core areas such as valuation, asset sales, and consultancy.
Begbies Traynor completed four acquisitions during the financial year, contributing over £9m in pro-forma revenue.
They included Banks Long & Co, a general chartered surveyors practice in Lincoln; a Cardiff-based insolvency team from Jones Giles & Clay; Andrew Forbes, a property valuation practice in Bristol; and SDL Auctions, a national property auction firm based in Nottingham.
The board said the additions strengthened the group's service offerings and regional presence, with integration and performance aligning with expectations.
The company said it had also invested in team development, IT and programme management capabilities, and third-party software applications to enhance operational efficiency.
Begbies Traynor also noted a new £35m debt facility agreement with HSBC, replacing the previous facility set to mature in August 2025.
The new facility included a £25m committed, unsecured revolving credit facility and a £10m accordion, providing additional capacity to support the group's growth strategy.
"We have delivered another strong performance, with EBITDA ahead of market expectations and net debt lower than anticipated," said executive chairman Ric Traynor.
"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."
Traynor said the company expected business recovery activity levels to remain strong, combined with a recovery in merger and acquisition activities and continued growth across the property services business.
"We are therefore confident of continuing to build upon our long track record of growth in the current year and beyond."
Begbies Traynor said it would report its final results for the year ended 30 April on 9 July.
At 1429 BST, shares in Begbies Traynor Group were up 2.14% at 107.25p.
Reporting by Josh White for Sharecast.com.
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