Business recovery services provider Begbies Traynor (LON: BEG) continues to grow through a combination of acquisitions and organic progress in both divisions. Although the number of insolvencies has dropped in the past year they remain at high levels and the recent UK Budget will put struggling businesses under more pressure.
In the six months to October 2024, the AIM-quoted company’s revenues were 16% ahead at £76.3m, including organic growth of 11%. Underlying pre-tax profit was 16% higher at £11.5m, while earnings were 12% ahead at 5.1p/share. The interim dividend is raised 8% to £1.4m.
Cash generation is strong, but acquisitions meant that Begbies Traynor moved to a net debt position of £3.8m.
Business recovery revenues were 12% higher at £52.8m and in the period that was all organic growth. Higher utilisation rates meant that operating profit grew 17% to £13.6m.
Property advisory revenues were 24% ahead at £23.5m. While most of that growth came from acquisitions the organic improvement was still 8%. The profit improvement was slower than the growth in revenues.
Canaccord Genuity has upgraded 2024-25 revenues by 3% to £152.2m, although the pre-tax profit forecast is maintained at £23.1m. Share buybacks mean that earnings will be slightly higher. Higher costs mean that profit is expected to edge up to £23.3m next year.
The share price rose 5.75p to 100.15p. The prospective multiple is nine.