Begbies Traynor turns in 'strong' first half performance

The AIM-traded firm said its adjusted profit before tax was £8m for the six months ended 31 October, rising from £5m in the prior year, which it put down to the benefit of acquisitions completed since January.

It said it maintained its strong financial position, with net cash standing at £1.2m at period end, down from £3m at the start of the period, but rising from £0.7m a year earlier.

The company said it had “significant” levels of headroom within its committed bank facilities, while acquisition and deferred consideration payments of £3m were made in the period.

As it previously guided, Begbies Traynor said it expected its results would have a second half weighting as it expected an increase in insolvency activity over the rest of its financial year.

The board said that overall, it remained confident of delivering market expectations for the full year, which would represent “significant” growth.

Begbies Traynor said the insolvency market had been suppressed since March 2020 due to government support measures during the pandemic.

However, since May 2021, the Insolvency Service reported month-on-month increases in insolvency appointments nationally, as those support measures were removed.

The firm said the increases to date were primarily in liquidations, which typically represent insolvencies of smaller companies, where the volume of appointments had now returned to pre-pandemic levels.

It had increased its share of the market segment in the year by volume, with the company adding that although the number of administrations, which typically involve larger and more complex instructions, had increased in recent months, they were still “significantly below” pre-pandemic levels.

On a divisional basis, Begbies Traynor said the business recovery and financial advisory division performed well in the first half, with the prior year acquisitions performing in line with expectations and integrated as planned.

Organic activity levels reflected the market dynamics in the six months.

The company’s corporate finance team had a successful six months of deal completions, and had a “strong pipeline” of transactions for the second half.

The MAF Finance Group acquisition, completed in May, had delivered results in line with expectations, with synergy and cross-selling opportunities identified as the business was integrated.

Finally, Begbies Traynor said its property advisory and transactional services division performed well, and achieved year-on-year growth in revenue and profit, including acquisitions, from a normalised trading performance when compared to the lockdown-impacted comparative period.

“I am pleased to report a strong financial performance in the first six months of our financial year, which is testament to the benefit and integration of our recent acquisitions,” said executive chairman Ric Traynor.

“We remain confident of delivering market expectations for the full year, which will represent a year of significant growth and ensures we are well placed to continue to invest in our successful growth strategy.”

Begbies Traynor said it would report its half-year results for the six months ended 31 October on 14 December.

At 1438 GMT, shares in Begbies Traynor Group were down 0.22% at 138.5p.