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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Begbies Traynor Group Plc | LSE:BEG | London | Ordinary Share | GB00B0305S97 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 3.50 | 3.40% | 106.50 | 103.50 | 105.50 | 106.50 | 105.00 | 105.50 | 67,155 | 09:55:58 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 121.83M | 2.91M | 0.0185 | 57.03 | 166.17M |
From May 2019 to May 2024
TIDMBEG
RNS Number : 6528K
Begbies Traynor Group PLC
11 July 2017
11 July 2017
Begbies Traynor Group plc
Final results
for the year ended 30 April 2017
Begbies Traynor Group plc (the 'company' or the 'group'), the business recovery, financial advisory and property services consultancy, today announces its final results for the year ended 30 April 2017.
Financial highlights*
Hot Features
Premium
2017 2016**
GBPm GBPm
------------------------- ----- -------
Revenue 49.7 50.1
Adjusted profit before
tax*** 4.9 4.5
Profit before tax 0.6 0.9
------------------------- ----- -------
Adjusted basic EPS****
(p) 3.3 3.2
Basic EPS (p) 0.2 0.4
Proposed total dividend
(p) 2.2 2.2
------------------------- ----- -------
Net debt 10.3 10.4
------------------------- ----- -------
*All figures stated from continuing operations
** Restated as detailed in note 1
*** Profit before tax from continuing operations of GBP0.6m (2016: GBP0.9m) plus amortisation of intangible assets arising on acquisitions of GBP2.5m (2016: GBP2.8m) plus transaction costs of GBP1.6m (2016: GBP0.8m) and refinancing costs of GBP0.2m (2016: nil)
**** See reconciliation in note 6
Operational highlights
-- A year of further progress in developing the group -- Solid performance in business recovery and financial advisory services:
o Profits broadly maintained in spite of lowest level of corporate insolvencies since 2004
o Increased operating margins to 20.3% (2016: 19.8%)
o Remain the leading UK corporate appointment taker by volume
-- Growth in revenue and profits in our property services division:
o Now contributes approximately 30% of group revenue and profit
o Acquisition of Pugh & Co in June 2016; now the UK's largest regional firm of commercial property auctioneers by number of lots
o Continued investment in valuation team following Taylors acquisition in November 2015, further enhancing expertise and geographical coverage
-- Business strongly cash generative, enabling funding of acquisition payments whilst reducing net debt
-- Refinanced debt facilities through to 2021 at a lower cost than the previous facilities
Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor Group, said:
"We have had a year of further progress in developing the group and broadening its service offerings, with earnings in line with expectations. The results reflect a solid performance in business recovery together with the benefit of our diversification into property services, which now contributes approximately 30% of the group's revenue and profit, and is an important focus of our growth strategy.
"We remain the leading UK corporate appointment taker by volume and are well-positioned to take advantage of the cyclicality of this market. Looking forward, we anticipate a growth in earnings in the new financial year as the board continues to look for further opportunities to develop and enhance the business, both organically and through selective acquisitions."
A meeting for analysts will be held today at 9.15am for 9.30am at the offices of MHP Communications, 6 Agar Street, London WC2N 4HN. Please contact Pete Lambie on 020 3128 8475 or via peter.lambie@mhpc.com if you would like to attend.
Enquiries please contact:
Begbies Traynor Group plc 0161 837 1700
Ric Traynor - Executive Chairman
Nick Taylor - Group Finance Director
Canaccord Genuity Limited 020 7523 8350
(Nominated Adviser and Joint Broker)
Bruce Garrow
Shore Capital 020 7408 4090
(Joint Broker)
Mark Percy / Anita Ghanekar
MHP Communications 020 3128 8100
Reg Hoare / Katie Hunt / Giles Robinson
Information on Begbies Traynor Group can be accessed via the Group's website at
www.begbies-traynorgroup.com
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report a year of further progress in developing the group and broadening its service offerings, with earnings for the year in line with expectations. The results reflect a solid performance in business recovery together with the benefit of our diversification into property services. The latter now contributes approximately 30% of the group's revenue and profit and is an important focus of our growth strategy.
Activity in business recovery for the year as a whole was impacted by the insolvency market being at the lowest level since 2004, which particularly affected the first half year. However, activity levels improved in the second half (as anticipated) giving improved performance on both the first half and the comparative period in 2016.
We remain the leading UK corporate appointment taker by volume and are well positioned to take advantage of the cyclicality of this market. We have made good progress in developing our financial advisory activities and have been appointed on a number of notable engagements in the year, which has helped to mitigate the reduction in insolvency activity.
Overall, in spite of the historically low insolvency volumes, profits from business recovery and financial advisory services have been broadly maintained from the prior year, as a result of our continued focus on cost control, enabling us to deliver an improvement in margins.
We have delivered growth in revenue and profits in our property services division, in which we have continued to invest both organically and through acquisitions. In June 2016 we acquired Pugh & Co, the property auctions business, which we have integrated and is now the largest regional firm of commercial property auctioneers (by number of lots). We have invested in our property valuation team through the recruitment of experienced surveyors, which has enhanced both our expertise and geographical coverage.
The strong revenue and profit uplift from these investments has been partially offset by reduced levels of insolvency-related activity in property services (as anticipated) and the prior year exit from low margin contracts.
The group remains strongly cash generative, which has enabled us to fund acquisition and deferred consideration payments in the year of GBP2.9m, whilst reducing net debt to GBP10.3m as at 30 April 2017 (2016: GBP10.4m).
In November 2016, we refinanced our debt facilities, which are now provided solely by HSBC. The new facilities provide the group with committed funds through to 2021, are at a lower cost than our previous facilities and provide us with the financial strength and flexibility to execute our strategy of organic and acquisitive growth.
Having considered the financial performance in the year, the outlook for the new financial year and the opportunity for future investments, the board recommends that the dividend for the year is maintained at 2.2p.
RESULTS
Group revenue from continuing operations in the year ended 30 April 2017 of GBP49.7m (2016: GBP50.1m). Adjusted profit before tax* increased to GBP4.9m (2016: GBP4.5m). Profit before tax was GBP0.6m (2016: GBP0.9m). Statutory loss for the year (including loss from discontinued operations of GBP0.5m) was GBP0.3m (2016: profit of GBP0.4m).
Earnings per share from continuing operations**, adjusted for the net of tax impact of amortisation of intangible assets arising on acquisitions, transaction costs and refinancing costs were 3.3p (2016: 3.2p). Basic and fully diluted earnings per share from continuing operations were 0.2p (2016: 0.4p).
Net debt of GBP10.3m at 30 April 2017 (2016: GBP10.4m), after making acquisition and deferred consideration payments in the year of GBP2.9m. Gearing stood at 18% (2016: 17%) and the group retains significant headroom in its committed banking facilities. Interest cover*** was 7.2 times (2016: 5.5 times).
* Profit before tax from continuing operations of GBP0.6m (2016: GBP0.9m) plus amortisation of intangible assets arising on acquisitions of GBP2.5m (2016: GBP2.8m) plus transaction costs of GBP1.6m (2016: GBP0.8m) and refinancing costs of GBP0.2m (2016: nil)
** See reconciliation in note 6
*** Before amortisation, transaction costs and refinancing costs
DIVID
The board remains committed to a long-term progressive dividend policy, and intends to increase dividends when we are confident of both the market outlook and continuing our recent earnings growth.
Having considered the results for the year and the group's financial position, together with the outlook for the new financial year and the investment requirements of the business, the board has recommended (subject to shareholder approval at the company's annual general meeting) the total dividend be maintained at 2.2p (2016: 2.2p). This comprises the interim dividend already paid of 0.6p (2016: 0.6p) and a final dividend of 1.6p (2016: 1.6p).
The final dividend will be paid on 8 November 2017 to shareholders on the register on 13 October 2017, with an ex-dividend date of 12 October 2017.
PEOPLE
The success of our business is reliant on the quality of advice delivered to our clients by our people. I would like to thank all of our colleagues for their contribution over the course of this year.
OUTLOOK
The financial performance of the group's counter-cyclical activities in both business recovery and property services, which generate the majority of the group's revenue, are directly related to the national insolvency market.
Activity levels in business recovery have improved in calendar year 2017, with national appointment numbers for the first calendar quarter showing growth on the comparative period in 2016. In the event that this increase in activity levels is sustained throughout the year, then we anticipate an increase in earnings in our
insolvency-related activities. However, we expect a typical summer period of lower activity levels and will have a better view on outlook later in the year.
Financial performance in property services in 2017 benefitted from a consultancy fee which we do not expect to be repeated in the new financial year. Therefore, earnings growth on a like for like basis will be dependent on either the success of our organic growth initiatives or potential acquisitions.
Overall, we anticipate a growth in earnings in the new financial year. We will continue to look for further opportunities to develop and enhance the business, both organically and through selective acquisitions.
An update on current trading will be provided at the time of the company's annual general meeting in September 2017.
Ric Traynor
Executive chairman
11 July 2017
STRATEGIC REPORT
Begbies Traynor Group plc is a leading business recovery, financial advisory and property services consultancy, providing services nationally from a comprehensive network of UK locations through two complementary operating divisions.
Business recovery and financial advisory services
Begbies Traynor is the UK's leading independent business recovery practice, handling the largest number of corporate appointments, principally serving the mid-market and smaller companies.
BTG Financial Consulting provides transactional support, valuations and advisory services.
We provide these services to businesses, professional advisors, other stakeholders, investors and financial institutions, working with all the major UK clearing banks.
Property services
Eddisons is a national firm of chartered surveyors, delivering advisory and transactional services to owners and occupiers of commercial property, investors and financial institutions. The division includes Pugh & Co, the largest regional firm of commercial property auctioneers by number of lots.
STRATEGY
Our strategy is to be recognised as a leading UK professional services consultancy, delivering business recovery, financial advisory and property advisory services.
We continue to deliver this through developing our expertise in:
-- Business restructuring and insolvency; -- Valuation and advisory services; -- Transactional support; and -- Commercial property services
to our client base of UK businesses; financial institutions and the investment community; commercial property owners and occupiers; individuals and professional advisors.
We operate on a national basis throughout the UK, with a partner-led service in the local business community. We also have the added capability of providing expertise in key global jurisdictions through our international alliance under the BTG Global Advisory network of associated firms.
We will enhance our expertise through ongoing investment in the group, both organically and through selective acquisitions.
OPERATING REVIEW
Business recovery and financial advisory
Insolvency market
The number of corporate insolvencies (source: The Insolvency Service) in calendar year 2016* was broadly unchanged at 14,736 (2015: 14,657), representing the lowest level of corporate appointments since 2004. Appointment numbers in the quarter ended 31 March 2017 were 4,157, which represents an 8% increase on the comparable quarter in 2016 (2016: 3,842).
*Source: The Insolvency Service quarterly insolvency statistics, excluding the one off effect of 1,796 connected personal service companies which entered liquidation on the same date in 2016 following changes to claimable expenses rules.
Financial performance
Revenue in the period decreased to GBP36.2m (2016: GBP37.7m) as a result of the low level of market activity in the first half of the financial year. Segmental profits* were broadly maintained at GBP7.4m (2016: GBP7.5m) as a result of continued cost control with an improvement in operating margins to 20.3% (2016: 19.8%).
Following a particularly quiet period in the first half of the financial year, activity levels improved in the second half (as anticipated) giving improved performance on both the first half of the financial year and the comparative period in 2016. However, we anticipate a typical summer period of lower activity levels and will have a better view on outlook later in the year.
We have made good progress in developing our financial advisory services through our London-based BTG Financial Consulting team, which has helped to mitigate the reduction in insolvency activity. They have advised on a number of significant transactions in the year providing restructuring, due diligence, valuation and other advisory services.
The number of people employed in the division has reduced to 337 as at 30 April 2017 from 355 at the start of the financial year. We have continued to develop our team and are pleased to have promoted two fee earners to partner during the year. We retain the capacity to deliver growth in revenue and profits from our existing team in the event of an increase in activity levels.
We have maintained our market share and remain the leading corporate appointment taker by volume.
* See note 2
Property services
Revenue increased to GBP13.5m (2016: GBP12.4m) with an increase in segmental profits* to GBP2.9m (2016: GBP2.4m). Operating margins improved to 21.6% (2016: 19.4%).
The strong revenue and profit growth from current and prior year acquisitions has been partially offset by reduced levels of insolvency-related activity in property services (as anticipated) and the prior year exit from low margin contracts. The business also benefitted from one-off consultancy fee income of GBP0.4m in the first half of the year following the conclusion of an advisory contract.
The Eddisons teams are working alongside Begbies Traynor teams on a number of insolvency engagements, which is leading to value being retained in the group on these engagements.
The Pugh & Co property auctions business, which was acquired in June 2016 to enhance our property transactional services, has been fully integrated with our existing Eddisons auctions business and has performed well and in line with expectations. The business is now the largest regional firm of commercial property auctioneers (by number of lots).
We have continued to develop our property valuation business following the acquisition of the Taylors valuation practice in November 2015, which has continued to perform in line with expectations. During the year, we have enhanced both our expertise and geographical coverage through the recruitment of experienced surveyors. The team now provides a full range of property valuations and recovery advice to all the major banks on a national basis. Our enhanced team, together with our bank accreditations, provides the opportunity for further development in the new financial year.
We anticipate that any further reduction in property-related insolvency work in the new financial year will be offset by increased levels of valuation activity.
The number of people employed in the division has increased to 170 as at 30 April 2017 from 150 at the start of the financial year.
In the new financial year, we will continue to invest in the division through senior recruitment, in addition to seeking further acquisitions. These growth initiatives will develop both our service offering and geographical coverage.
* See note 2
Partners and employees
As at 30 April 2017, the group employed a total of 545 partners and staff (2016: 547); this comprises 384 fee earners and 161 support staff.
FINANCE REVIEW
Financial summary
Restated
2017 2016
GBP'000 GBP'000
Revenue from continuing operations 49,685 50,135
------------------------------------- ------- --------
Operating profit (before transaction
costs and amortisation) 5,627 5,488
Interest costs (776) (999)
------------------------------------- ------- --------
Adjusted profit before tax 4,851 4,489
Refinancing costs (225) -
Transaction costs (1,545) (790)
Amortisation of intangible assets
arising on acquisitions (2,439) (2,827)
------------------------------------- ------- --------
Profit before tax 642 872
Tax (429) (424)
------------------------------------- ------- --------
Profit for the year from continuing
operations 213 448
------------------------------------- ------- --------
Revenue
Revenue in the year was GBP49.7m (2016: GBP50.1m).
Property services revenue increased by GBP1.1m, reflecting:
-- the benefit of the Pugh acquisition in June 2016 of GBP2.0m;
-- the full year impact of the prior year acquisition of the Taylors valuation practice of GBP0.9m; partially offset by
-- reduced revenue from insolvency-related activities of GBP0.9m; and -- the prior year exit from low margin contracts of GBP0.9m.
Business recovery and financial advisory revenue decreased by GBP1.5m, as a result of:
-- low levels of market activity in the first half of the financial year reducing revenue by GBP2.7m; partially offset by
-- increased revenue from advisory services of GBP1.2m.
Revenue generated from businesses acquired in the financial year was GBP2.0m.
Operating profit (before transaction costs and amortisation)
Operating profit increased to GBP5.6m (2016: GBP5.5m) with margins increased to 11.3% (2016: 10.9%).
Operating costs (excluding transaction costs and amortisation) net of other income decreased to GBP44.1m (2016: GBP44.6m). Cost reductions in the year of GBP1.6m were partially offset by costs associated with acquired businesses of GBP1.1m.
Interest costs
Interest costs reduced to GBP0.8m (2016: GBP1.0m), as a result of the group's reduced borrowing costs following the refinancing in November 2016.
Refinancing costs
One-off costs incurred in connection with the refinancing of the group's banking facilities in the year were GBP0.2m.
Transaction costs
Transaction costs in the year of GBP1.5m (2016: GBP0.8m) comprise:
-- acquisition costs of GBP0.1m (2016: GBP0.3m); -- deemed remuneration charges of GBP1.4m (2016: GBP1.1m);
-- charge relating to the put and call option over Begbies Traynor (London) LLP of GBP0.3m (2016: nil); offset by
-- gain on acquisition of GBP0.3m (2016: GBP0.6m).
Amortisation of intangible assets arising on acquisitions
Amortisation costs decreased to GBP2.4m (2016: GBP2.8m).
Tax
The tax charge for the year (prior to the credit resulting from amortisation, refinancing and transaction costs) was GBP1.3m (2016: GBP1.1m) representing an effective tax rate of 27% (2016: 25%). The tax credit resulting from amortisation, refinancing and transaction costs was GBP0.9m (2016: GBP0.7m).
The overall tax charge for the year from continuing operations was GBP0.4m (2016: GBP0.4m).
Earnings per share ('EPS')
EPS*, adjusted for the net of tax impact of amortisation, refinancing and transaction costs, were 3.3p (2016: 3.2p).
Basic and diluted earnings per share of 0.2p (2016: 0.4p).
* See reconciliation in note 6
Discontinued operations
In the year ended 30 April 2015 the group discontinued its global risk partners division. A post-tax impairment charge of GBP0.5m has been recognised in the year ended 30 April 2017 against deferred consideration receivable.
Acquisitions
On 3 June 2016 the group acquired the entire issued share capital of Pugh Auction Group Limited ("Pugh & Co") on a cash free, debt free basis for an initial cash consideration of GBP2.0m.
Under the terms of the acquisition, additional contingent consideration of up to GBP2.625m will become payable subject to the achievement of stretching financial targets for the consolidated auctions business (representing the original Eddisons auctions business and Pugh & Co) in the five year period directly following completion, calculated according to an agreed formula.
Up to GBP0.25m of the contingent consideration is payable based on meeting financial targets in the first year post acquisition and may be satisfied through either the issuing of new ordinary shares at the prevailing market value or cash at the Group's discretion. The remainder of the contingent consideration is payable in cash over the five year period post acquisition.
A proportion of the consideration payable for this acquisition requires post-acquisition service obligations to be performed by the selling shareholder. These amounts are treated as deemed remuneration and charged to the consolidated statement of comprehensive income over the period of the obligation.
As a result of this accounting guidance, the value of net assets acquired (GBP2.1m) exceeds the accounting value of the consideration (GBP1.8m) and consequently a gain of GBP0.3m has been recognised as a transaction cost in the year.
Cash flows
Cash generated by operations (before interest and tax payments) in the year was GBP8.0m (2016: GBP7.9m). Tax payments in the year were GBP1.5m (2016: GBP0.1m). Interest payments were GBP0.9m (2016: GBP1.0m).
Cash outflows from investing activities were GBP3.2m (2016: GBP2.1m). Capital expenditure was GBP0.3m (2016: GBP0.5m). Deferred payments relating to prior year acquisitions were GBP1.1m (2016: GBP0.6m). Acquisition payments (net of cash acquired) were GBP1.8m (2016: GBP0.9m).
Financing cash outflows were GBP3.3m (2016: GBP6.3m). During the year we reduced the level of drawn debt under our banking facilities by GBP1.0m (2016: GBP4.0m). Dividend payments were GBP2.3m (2016: GBP2.3m).
Financing
On 1 November 2016, we renewed our debt facilities, in line with our previously stated intention to renew them during the financial year.
The new GBP30m facilities are being provided by HSBC solely and replace the group's previous GBP30m facilities. These were due to mature between July 2017 and April 2021 and were provided by three lenders (including HSBC).
The new facilities are unsecured, mature on 31 August 2021 and comprise a GBP25m committed revolving credit facility and a GBP5m uncommitted acquisition facility. These facilities are at a lower overall cost to the previous facilities.
The arrangement costs associated with this refinancing will be recognised over the expected life of the facilities in accordance with IFRS. One-off costs charged in the year for early settlement charges were GBP0.2m with the full benefit of the reduced borrowing costs being realised in future years.
Net borrowings reduced to GBP10.3m at 30 April 2017 (2016: GBP10.4m), with gearing of 18% (2016: 17%) and significant headroom within the committed banking facilities. During the year, all bank covenants were comfortably met and the group remains in a strong financial position. Interest cover* was 7.2 times (2016: 5.5 times).
* Before amortisation, refinancing costs and transaction costs
Net assets
At 30 April 2017 net assets were GBP58.1m (2016: GBP60.2m).
Non-current assets were GBP60.0m (2016: GBP60.4m), with intangible assets recognised on acquisitions and capital expenditure in the year broadly offset by depreciation and amortisation charges.
Trade and other receivables were GBP29.8m (2016: GBP34.5m).
Net borrowings reduced to GBP10.3m (2016: GBP10.4m).
Trade and other payables were GBP13.9m (2016: GBP15.8m). The balance includes trade creditors of GBP1.2m (2016: GBP1.6m), accruals of GBP4.5m (2016: GBP5.9m), tax and social security creditors of GBP2.4m (2016: GBP2.2m), deferred income of GBP2.0m (2016: GBP2.7m), other creditors of GBP3.1m (2016: GBP2.7m), and deferred consideration liabilities of GBP0.7m (2016: GBP0.6m) of which GBP0.4m (2016: GBP0.6m) is payable within one year.
Current tax liabilities were GBP0.8m (2016: GBP1.3m). Net deferred tax liabilities were GBP5.4m (2016: GBP5.5m).
Provisions for property costs and post-disposal obligations total GBP1.2m (2016: GBP1.7m) of which GBP0.8m is payable within one year.
Going concern
The directors have reviewed the financial resources available to the group and have concluded that the group will be able to operate within the level of its borrowing facilities and have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. This conclusion is based, amongst other matters, on the group's existing borrowing facilities and a review of financial forecasts for a period exceeding 12 months from the date of this announcement. Accordingly, the financial information in this announcement is prepared on the going concern basis.
Ric Traynor Nick Taylor Executive chairman Group finance director 11 July 2017 11 July 2017
Consolidated statement of comprehensive income
Restated
2017 2016
GBP'000 GBP'000
----------------------------------------------------------- ----------- ---------
Continuing operations
Revenue 49,685 50,135
Direct costs (28,130) (28,058)
------------------------------------------------------------ ----------- ---------
Gross profit 21,555 22,077
Other operating income 397 249
Administrative expenses (20,309) (20,455)
------------------------------------------------------------ ----------- ---------
Operating profit before amortisation and transaction costs 5,627 5,488
Transaction costs (1,545) (790)
Amortisation of intangible assets arising on acquisitions (2,439) (2,827)
------------------------------------------------------------ ----------- ---------
Operating profit 1,643 1,871
Finance costs (1,001) (999)
------------------------------------------------------------ ----------- ---------
Profit before tax 642 872
Tax (429) (424)
------------------------------------------------------------ ----------- ---------
Profit for the year from continuing operations 213 448
------------------------------------------------------------ ----------- ---------
Discontinued operations
Loss from the year from discontinued operations (476) -
------------------------------------------------------------ ----------- ---------
(Loss) profit for the year (263) 448
------------------------------------------------------------ ----------- ---------
Other comprehensive income
Exchange differences on translation of foreign operations 2 3
------------------------------------------------------------ ----------- --------- Total comprehensive (loss) income for the year (261) 451 ------------------------------------------------------------ ----------- --------- Earnings (loss) per share From continuing operations Basic and diluted 0.2 pence 0.4 pence ------------------------------------------------------------ ----------- --------- From continuing and discontinued operations Basic and diluted (0.2) pence 0.4 pence ------------------------------------------------------------ ----------- ---------
The profit and comprehensive income for both years is attributable to equity holders of the parent.
Consolidated statement of changes in equity
Share Share Merger Translation Retained Total
capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
At 1 May 2015 as previously reported 5,536 22,473 17,584 (5) 15,392 60,980
Restatement - - - - 395 395
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
At 1 May 2015 as restated 5,536 22,473 17,584 (5) 15,787 61,375
Profit for the year as restated - - - - 448 448
Other comprehensive income:
Exchange differences on translation of foreign operations - - - 3 - 3
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
Total comprehensive loss for the year - - - 3 448 451
Dividends - - - - (2,302) (2,302)
Credit to equity for equity-settled share-based payments - - - - 62 62
Shares issued 75 569 - - - 644
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
At 30 April 2016 as restated 5,611 23,042 17,584 (2) 13,995 60,230
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
Loss for the year - - - - (263) (263)
Other comprehensive income:
Exchange differences on translation of foreign operations - - - 2 - 2
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
Total comprehensive income for the year - - - 2 (263) (261)
Dividends - - - - (2,335) (2,335)
Credit to equity for equity-settled share-based payments - - - - 431 431
Shares issued 29 216 - - (210) 35
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
At 30 April 2017 5,640 23,258 17,584 - 11,618 58,100
---------------------------------------------------------- ------- ------- ------- ----------- -------- -------
The merger reserve arose on the formation of the group in 2004.
Consolidated balance sheet
2017 Restated
2016
GBP'000 GBP'000
--------------------------------------------- -------- --------
Non-current assets
Intangible assets 58,471 58,407
Property, plant and equipment 1,498 1,979
---------------------------------------------- -------- --------
59,969 60,386
--------------------------------------------- -------- --------
Current assets
Trade and other receivables 29,761 34,465
Cash and cash equivalents 6,715 7,634
---------------------------------------------- -------- --------
36,476 42,099
--------------------------------------------- -------- --------
Total assets 96,445 102,485
---------------------------------------------- -------- --------
Current liabilities
Trade and other payables (13,585) (15,762)
Current tax liabilities (843) (1,263)
Provisions (755) (728)
---------------------------------------------- -------- --------
(15,183) (17,753)
--------------------------------------------- -------- --------
Net current assets 21,293 24,346
---------------------------------------------- -------- --------
Non-current liabilities
Trade and other payables (335) -
Borrowings (17,000) (18,000)
Provisions (418) (994)
Deferred tax (5,409) (5,508)
---------------------------------------------- -------- --------
(23,162) (24,502)
--------------------------------------------- -------- --------
Total liabilities (38,345) (42,255)
---------------------------------------------- -------- --------
Net assets 58,100 60,230
---------------------------------------------- -------- --------
Equity
Share capital 5,640 5,611
Share premium 23,258 23,042
Merger reserve 17,584 17,584
Translation reserve - (2)
Retained earnings 11,618 13,995
---------------------------------------------- -------- --------
Equity attributable to owners of the company 58,100 60,230
---------------------------------------------- -------- --------
Consolidated cash flow statement
2017 2016
GBP'000 GBP'000
----------------------------------------------- ------- -------
Cash flows from operating activities
Cash generated by operations 7,974 7,909
Income taxes paid (1,462) (139)
Interest paid (919) (996)
------------------------------------------------ ------- -------
Net cash from operating activities 5,593 6,774
------------------------------------------------ ------- -------
Investing activities
Purchase of property, plant and equipment (289) (511)
Purchase of intangible fixed assets (8) (13)
Proceeds on disposal of fixed assets - 10
Deferred consideration payments (1,144) (639)
Acquisition of businesses (1,773) (937)
------------------------------------------------ ------- -------
Net cash from investing activities (3,214) (2,090)
------------------------------------------------ ------- -------
Financing activities
Dividends paid (2,335) (2,302)
Proceeds on issue of shares 37 43
Repayment of loans (1,000) (4,000)
------------------------------------------------ ------- -------
Net cash from financing activities (3,298) (6,259)
------------------------------------------------ ------- -------
Net decrease in cash and cash equivalents (919) (1,575)
Cash and cash equivalents at beginning of year 7,634 9,209
------------------------------------------------ ------- -------
Cash and cash equivalents at end of year 6,715 7,634
------------------------------------------------ ------- -------
1. Basis of preparation and accounting policies
The results for the year ended 30 April 2017 have been prepared on the basis of accounting policies consistent with those set out in the annual report to shareholders of Begbies Traynor Group plc for the year ended 30 April 2016, except for the change in accounting relating to acquisitions where the consideration payable requires post-acquisition service obligations to be performed by the selling shareholders, as noted below.
The group's financial statements for the year ended 30 April 2017 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the EU. Whilst the financial information included in this announcement has been prepared in accordance with IFRS, this announcement itself does not contain sufficient information to comply with IFRS.
This financial information does not include all of the information and disclosures required for full annual financial statements and does not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006.
The comparative figures for the year ended 30 April 2016 do not comprise the group's statutory accounts for that financial year. Those accounts have been reported upon by the group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
Statutory accounts for Begbies Traynor Group plc for 2017 will be delivered to the Registrar of Companies following the company's annual general meeting. The auditors have reported on these accounts; their report is unqualified and does not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under either section 498 (2) or (3) of the Companies Act 2006. The 2017 annual report will be available on the group's website: www.begbies-traynorgroup.com.
Going concern
In carrying out their duties in respect of going concern, the directors have completed a review of the group's current financial position and cash flow forecasts for a period exceeding 12 months from the date of this announcement. This review included sensitivity analysis to determine the potential impact on the group of reasonably possible downside scenarios. Under all modelled scenarios, the group's banking facilities were sufficient and all associated covenant measures were forecast to be met.
After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, this financial information is prepared on the going concern basis.
Prior year restatement
During the year the group updated its accounting in respect of the acquisition of subsidiaries and businesses where the consideration payable requires post-acquisition service obligations to be performed by the selling shareholders. The group previously recognised the total expected liability within the initial accounting for the acquisition, with any amounts relating to future obligations included as an asset within trade and other receivables.
The group will now recognise the liability prospectively over the period of the obligation with any asset or liability only arising due to a timing difference between the contractual payment date and the date of the service obligation being provided. There is no change to the deemed remuneration charge to the consolidated statement of comprehensive income as a result of this accounting change. In addition, the group previously recognised a deferred tax liability together with discounting future payments in relation to the deemed remuneration, which will no longer be recognised.
The net impact of these adjustments was a GBP0.4m credit to opening reserves at 1st May 2015 (for all acquisitions prior to 30 April 2015) and a GBP0.2m credit to the 2016 comparative consolidated statement of comprehensive income. The group's KPI's of adjusted profit before tax and adjusted EPS were not impacted by
this restatement. There were no restatements to reported cashflows.
The impact on each line item on the primary financial statements is shown in the table below:
As reported Adjustments Restated
2016 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ ---------
Consolidated income statement
Transaction costs (1,080) 290 (790)
Finance costs (1,023) 24 (999)
Tax (264) (160) (424)
Profit for the year from continuing
operations 294 154 448
Basic earnings per share
From continuing operations 0.3p 0.1p 0.4p
Consolidated balance sheet
Total assets 103,171 (686) 102,485
Total liabilities (43,490) 1,235 (42,255)
Total shareholders funds 59,681 549 60,230
------------------------------------- ------------ ------------ ---------
2. Segmental analysis by class of business
The group's operating segments are established on the basis of the components of the group that are evaluated regularly by the chief operating decision maker. The continuing group is managed as two operating segments: business recovery and financial advisory services and property services.
Business Property Consolidated
recovery services
and financial
advisory
services
2017 2017 2017
GBP'000 GBP'000 GBP'000
-------------------------------------- --------------- ---------- -------------
Revenue
Total revenue from rendering of
professional services 36,231 13,524 49,755
Inter-segment revenue - (70) (70)
-------------------------------------- --------------- ---------- -------------
External revenue 36,231 13,454 49,685
-------------------------------------- --------------- ---------- -------------
Segmental result 7,353 2,900 10,253
Shared and central costs (4,626)
-------------------------------------- --------------- ---------- -------------
Operating profit before amortisation
and transaction costs 5,627
-------------------------------------- --------------- ---------- -------------
Business Property Consolidated
recovery services
and financial
advisory
services
2016 2016 2016
GBP'000 GBP'000 GBP'000
-------------------------------------- --------------- ---------- -------------
Revenue
Total revenue from rendering of
professional services 37,723 12,417 50,140
Inter-segment revenue - (5) (5)
-------------------------------------- --------------- ---------- -------------
External revenue 37,723 12,412 50,135
-------------------------------------- --------------- ---------- -------------
Segmental result 7,478 2,410 9,888
Shared and central costs (4,400)
-------------------------------------- --------------- ---------- -------------
Operating profit before amortisation
and transaction costs 5,488
-------------------------------------- --------------- ---------- -------------
3. Discontinued operations
In the year ended 30 April 2015 the group discontinued its global risk partners division. In the year ended 30 April 2017, a post-tax impairment charge of GBP476k has been recognised in the year against deferred consideration receivable.
2017 2016
GBP'000 GBP'000
------------------------------------------------- ------- -------
Administrative expenses (594) -
------------------------------------------------- ------- -------
Loss before tax (594) -
Tax 118 -
------------------------------------------------- ------- -------
Loss for the period from discontinued operations (476) -
------------------------------------------------- ------- -------
4. Finance costs
Restated
2017 2016
Continuing GBP'000 GBP'000
------------------------------------------------ ------- --------
Interest on bank overdrafts and loans 760 981
Unwinding of discount on deferred consideration
liabilities 16 18
------------------------------------------------ ------- --------
Interest costs 776 999
Refinancing costs 225 -
Total finance costs 1,001 999
------------------------------------------------ ------- --------
5. Transaction costs
Restated
2017 2016
Continuing GBP'000 GBP'000
------------------------------------------- ------- --------
Deemed remuneration 1,420 1,058
Acquisition costs 141 287
Gain on acquisition (351) (555)
Charge relating to the put and call option
over Begbies Traynor (London) LLP 335 -
1,545 790
------------------------------------------- ------- --------
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Restated
2017 2016
GBP'000 GBP'000
----------------------------------------------- -------- --------
Earnings
----------------------------------------------- -------- --------
Profit for the year from continuing operations
attributable to equity holders 213 448
Loss from discontinued operations attributable
to equity holders (476) -
----------------------------------------------- -------- --------
(Loss) profit for the year attributable to
equity holders (263) 448
----------------------------------------------- -------- --------
2017 2016
number number
---------------------------------------------- ----------- -----------
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per share 107,246,497 105,245,846
Effect of dilutive potential ordinary shares:
Share options 1,688,849 1,156,466
Contingent shares 1,642,313 2,279,481
---------------------------------------------- ----------- -----------
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 110,577,659 108,681,793
---------------------------------------------- ----------- -----------
Restated
2017 2016
pence pence
------------------------------------- ------ --------
Basic earnings (loss) per share from
------------------------------------- ------ --------
Continuing operations 0.2 0.4
Discontinued operations (0.4) -
------------------------------------- ------ --------
Total (0.2) 0.4
------------------------------------- ------ --------
The following additional earnings per share figures are presented as the directors believe they provide a better understanding of the trading position of the group:
Restated
2017 2016
GBP'000 GBP'000
--------------------------------------------- -------- --------
Earnings from continuing operations
Profit for the year attributable to equity
holders 213 448
Amortisation of intangible assets arising on
acquisitions 2,439 2,827
Transaction costs 1,545 790
Refinancing costs 225 -
Tax effect of above items (875) (701)
Adjusted earnings 3,547 3,364
--------------------------------------------- -------- --------
2017 2016
pence pence
---------------------------------------------------- ------ ------
Adjusted basic earnings per share from continuing
operations 3.3 3.2
---------------------------------------------------- ------ ------
Adjusted diluted earnings per share from continuing
operations 3.2 3.1
---------------------------------------------------- ------ ------
7. Dividends
2017 2016
GBP'000 GBP'000
---------------------------------------------- -------- --------
Amounts recognised as distributions to equity
holders in the year
Interim dividend for the year ended 30 April
2016 of 0.6p (2015: 0.6p) per share 637 628
Final dividend for the year ended 30 April
2016 of 1.6p (2015: 1.6p) per share 1,698 1,674
---------------------------------------------- -------- --------
2,335 2,302
---------------------------------------------- -------- --------
Amounts proposed as distributions to equity
holders
Interim dividend for the year ended 30 April
2017 of 0.6p (2016: 0.6p) per share 640 637
Final dividend for the year ended 30 April
2017 of 0.6p (2016: 1.6p) per share 1,707 1,698
---------------------------------------------- -------- --------
2,347 2,335
---------------------------------------------- -------- --------
The proposed final dividend is subject to approval by shareholders at the annual general meeting in September 2017. The interim dividend for 2017 was not paid until 5 May 2017 and, accordingly, has not been included as a liability in these financial statements nor as a distribution to equity shareholders.
8. Reconciliation to the cash flow statement
Restated
2017 2016
GBP'000 GBP'000
------------------------------------------------- -------- --------
(Loss) profit for the year (263) 448
Adjustments for:
Tax 311 424
Finance costs 1,001 999
Amortisation of intangible assets 2,613 3,000
Depreciation of property, plant and equipment 769 848
Deemed remuneration 1,420 1,058
Charge relating to the put and call option
over Begbies Traynor (London) LLP 335 -
Gain on acquisition (351) (555)
Loss on disposal of property, plant & equipment 13 192
Loss on disposal of discontinued operations 594 -
Share-based payment expense 431 62
------------------------------------------------- -------- --------
Operating cash flows before movements in working
capital 6,873 6,476
Decrease in receivables 3,179 1,223
(Decrease) increase in payables (1,529) 1,449
Decrease in provisions (549) (1,239)
------------------------------------------------- -------- --------
Cash generated by operations 7,974 7,909
------------------------------------------------- -------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GGUAAMUPMGMU
(END) Dow Jones Newswires
July 11, 2017 02:00 ET (06:00 GMT)
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