A combination of organic and acquisitive growth continues to push forward the figures of AIM-quoted business recovery services provider Begbies Traynor (LOB: BEG) with higher insolvency figures increasing demand. Organic growth was around 6%.
The growth came from both the business insolvency business and the property and transactional services operations. Begbies Traynor has 14% of overall insolvency volumes, although many of these are small companies. The order book is 15% ahead at £33.9m.
In the six months to October 2022, revenues improved from £52.3m to £58.5m, while pre-tax profit rose from £8m to £9m. The interim dividend is 1.2p a share. Net debt was £2.4m at the end of October 2022, after spending £7.4m net on acquisitions.
Administration levels are still lower than at the beginning of 2019. Compulsory liquidations are also lower, but they are increasing at a faster rate.
The full year pre-tax profit forecast has been maintained at £19.7m, up from £17.8m. The total dividend is forecast at 3.7p a share. A strong third quarter trading statement in February could spark an upgrade.
The share price fell 9.6p to 137.2p, which means the shares are trading on less than 14 times prospective earnings. There are still potential increases in the insolvencies and administrations of larger companies and Begbies Traynor is in a strong position to make further progress in the next couple of years.
