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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Begbies Traynor Group | AQSE:BEG.GB | Aquis Stock Exchange | Ordinary Share | GB00B0305S97 | Ordinary Shares 5p |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -1.05% | 94.50 | 90.00 | 99.00 | 95.50 | 94.50 | 95.50 | 0.00 | 16:29:51 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Dec 2022 to Dec 2024
TIDMBEG
RNS Number : 2549W
Begbies Traynor Group PLC
11 December 2023
11 December 2023
Begbies Traynor Group plc
Half year results
for the six months ended 31 October 2023
"Strong first half performance and confidence in full year outlook"
Begbies Traynor Group plc (the 'company' or the 'group'), the professional services consultancy, today announces its half year results for the six months ended 31 October 2023.
Financial overview
Hot Features
Premium
2023 2022
GBPm GBPm
--------------------------------- ----- ------
Revenue 65.9 58.5
Adjusted EBITDA(1) 12.8 11.9
Adjusted profit before tax(1,2) 9.9 9.0
Profit before tax 3.0 5.0
--------------------------------- ----- ------
Adjusted diluted EPS(1,3)
(p) 4.6 4.4
Diluted EPS (p) 0.8 2.3
Interim dividend (p) 1.3 1.2
--------------------------------- ----- ------
Net cash (debt) 1.1 (2.4)
--------------------------------- ----- ------
Financial highlights - performing well with double digit growth
-- Strong first half performance building on consistent track record of growth in revenue and adjusted earnings
-- Growth in revenue of 13% (8% organic, 5% acquired) and adjusted profit before tax of 10%, having absorbed increased finance costs
-- Statutory profit before tax reflecting increased non-cash acquisition accounting charges
-- Increase in interim dividend to 1.3p (2022: 1.2p), which extends our six consecutive years of dividend growth since 2017
-- Strong balance sheet and significant levels of headroom within committed bank facilities
o Well placed to continue investing in successful organic and acquisitive growth strategy
o Positive cash position with net cash of GBP1.1m, after GBP4.0m of acquisition-related payments
Divisional highlights - growth across both divisions
-- Insolvency and financial advisory performed well
o Increased year on year insolvency activity levels
o Market-leading position maintained (by volume of appointments)
o Added capacity through recruitment for further growth
o Resilient financial advisory performance, with advice provided on refinancing and restructuring solutions mitigating reduced capital transactions in the period
-- Property advisory and transactional services continue to provide solid platform for growth
o Organic growth driven by our breadth of expertise and services
o Acquisitions trading well and in line with expectations
Current trading and outlook - in line with expectations
-- Confident of delivering full year results in line with current market expectations(4)
o Extending the group's strong financial track record of growth
o Anticipate continued increase in insolvency activity; financial advisory anticipated to deliver broadly consistent second half
o Property advisory and transactional services expected to deliver another year of strong growth
-- Q3 trading update will be issued in late February 2024
Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor Group, said:
"I am pleased to report a strong financial performance in the first six months of the financial year. We have continued to execute our strategy to grow the business, reporting double digit revenue and profit growth. The group's financial performance in the first six months leaves the board confident of delivering current market expectations(4) for the full year, which will extend our strong financial track record of growth.
"Our insolvency team has maintained its market-leading position (by volume) in a growing marketplace nationally, with an increase in insolvency numbers reflecting the current interest rate and inflation environment; whilst our advisory and transactional services teams had a successful six months, reflecting the breadth of advice we provide to our clients, which continue to provide a solid platform for growth.
"Our broad range of services, diversified client base, organic growth initiatives and pipeline of acquisition opportunities, combined with increasing counter-cyclical activity, leaves us confident of continuing to build upon our strong track record in the current year and beyond."
There will be a webcast and conference call for analysts today at 8:30am. Please contact Charles Hirst via begbies@mhpgroup.com or on 020 3128 8100 if you would like to receive details.
(1. The board uses adjusted performance measures to provide meaningful information on the performance of the business. The items excluded from adjusted PBT and EPS are those which arise due to acquisitions in accordance with IFRS 3 and are not influenced by the day-to-day operations of the group. Adjusted EBITDA excludes non-cash share-based payment and depreciation charges from adjusted PBT)
2. Profit before tax of GBP3.0m (2022: GBP5.0m) plus amortisation of intangible assets arising on acquisitions of GBP3.0m (2022: GBP3.2m) plus transaction costs of GBP3.9m (2022: GBP0.8m)
(3. See reconciliation in note 5)
4. Current range of analyst forecasts for adjusted PBT of GBP21.9m-GBP22.5m (as compiled by the group)
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)
Emma Gabriel / Harry Pardoe
Shore Capital
020 7408 4090
(Joint Broker)
Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas
MHP
020 3128 8100
Reg Hoare / Katie Hunt / Charles Hirst begbies@mhpgroup.com
Notes to editors
Begbies Traynor Group plc is a leading professional services consultancy, providing services from a comprehensive network of UK and off-shore locations. Our professional team include licensed insolvency practitioners, accountants, chartered surveyors, bankers and lawyers. We provide the following services to our client base of corporates, financial institutions, the investment community and the professional community:
-- Insolvency
o Corporate and personal insolvency
-- Financial advisory
o Business and financial restructuring; debt advisory; forensic accounting and investigations
-- Transactional support
o Corporate finance; business sales agency; property agency; auctions
-- Funding
o Commercial finance broking; residential mortgage broking
-- Valuations
o Commercial property, business and asset valuations
-- Projects and development support
o Building consultancy; transport planning
-- Asset management and insurance
o Commercial property management; insurance broking; vacant property risk management
Further information can be accessed via the group's website at www.ir.begbies-traynorgroup.com.
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report a strong financial performance in the first six months of the financial year. We have continued to execute our strategy to grow the business, reporting double digit revenue and profit growth.
We have a proven growth strategy which, over the five year period between 2019 and 2023, doubled revenue from GBP60m to GBP122m and tripled adjusted profit before tax from GBP7m to GBP21m, from a combination of organic growth and acquisitions. This growth has been delivered across insolvency and our full range of advisory and transactional services. Our ambition is to maintain this growth track record with a medium-term revenue target of GBP200m.
We have continued to grow both divisions in the half year, both organically and through acquisitions.
Our insolvency teams have had a busy period with an increase in year-on-year activity levels. We have maintained our market-leading position (by volume) in a growing marketplace nationally, which is continuing to see an increase in insolvency numbers reflecting the current interest rate and inflation environment.
Our financial advisory teams have delivered a resilient performance in the period, driven by advice provided on refinancing and restructuring solutions, which has mitigated an anticipated reduction in capital transactions (M&A and capital investment).
Our property advisory and transactional teams have had a successful six months, reflecting the breadth of advice we provide to our clients, which continues to provide a solid platform for growth.
We have continued to invest in the group, having completed three acquisitions since the beginning of the financial year, as we continue to build our teams. These earnings accretive acquisitions align well with the group's current service offerings whilst strengthening our existing regional presence. Integration is proceeding well with initial trading performance in line with expectations.
Our strong financial position leaves us well placed to continue to invest in the business, both organically and through acquisitions, to further build our scale and range of complementary services.
RESULTS
Group revenue in the half year ended 31 October 2023 increased by 13% to GBP65.9m (2022: GBP58.5m). Adjusted profit before tax(1,2) increased by 10% to GBP9.9m (2022: GBP9.0m), having absorbed increased finance costs. Statutory profit before tax was GBP3.0m (2022: GBP5.0m), reflecting an increase in acquisition-related transaction costs to GBP3.9m (2022: GBP0.8m) and non-cash amortisation costs of GBP3.0m (2022: GBP3.2m).
Adjusted diluted earnings per share(1,3) was 4.6p (2022: 4.4p), reflecting increased UK corporation tax rates in the period. Diluted earnings per share was 0.8p (2022: 2.3p).
Net cash as at 31 October 2023 was GBP1.1m (30 April 2023: net cash of GBP3.0m, 31 October 2022: net debt of GBP2.4m), after GBP4.0m of acquisition related payments in the period (net of cash acquired).
(1. The board uses adjusted performance measures to provide meaningful information on the performance of the business. The items excluded from adjusted PBT and EPS are those which arise due to acquisitions in accordance with IFRS 3 and are not influenced by the day-to-day operations of the group)
2. Profit before tax of GBP3.0m (2022: GBP5.0m) plus amortisation of intangible assets arising on acquisitions of GBP3.0m (2022: GBP3.2m) plus (transaction costs) of GBP3.9m (2022: GBP0.8m)
(3.) (See reconciliation in note 5)
DIVID
The board is pleased to declare an 8% increase in the interim dividend to 1.3p (2022: 1.2p), which will extend our six consecutive years of dividend growth since 2017 and reflects our confidence in sustaining our financial track record and in the group's financial position and prospects. We remain committed to a long-term progressive dividend policy, which takes account of the group's earnings growth, our investment plans and cash requirements, together with the market outlook.
The interim dividend will be paid on 7 May 2024 to shareholders on the register on 12 April 2024, with an
ex-dividend date of 11 April 2024.
OUTLOOK
The group's financial performance in the first six months leaves the board confident of delivering current market expectations(1) for the full year, which will extend our strong financial track record of growth.
We anticipate that activity levels in our largest service line of insolvency will continue to increase in tandem with the indicators of corporate financial stress in the UK, resulting from the current interest rate and inflation environment. This gives the board confidence that the insolvency team will continue to deliver growth through the second half of the current year and thereafter.
We expect our financial advisory services to deliver a broadly consistent performance in the second half.
We anticipate our property advisory and transactional services division will report another year of strong growth, benefitting from the organic growth seen in the first half and the contribution from current year acquisitions.
Our broad range of services, diversified client base, organic growth initiatives and pipeline of acquisition opportunities, combined with increasing counter-cyclical activity, leaves us confident of continuing to build upon our strong track record in the current year and beyond.
We will provide an update on third quarter trading in late February 2024.
(1.) (C) urrent range of analyst forecasts for adjusted PBT of GBP21.9m-GBP22.5m (as compiled by the group)
Ric Traynor
Executive Chairman
11 December 2023
BUSINESS REVIEW
OPERATING REVIEW
Insolvency and advisory
Financial summary
Revenue in the period increased by 11% (9% organic) to GBP47.0m (2022: GBP42.4m), reflecting increased insolvency activity levels partially offset by a quieter market for our advisory teams. Revenue from formal insolvency appointments increased by 17% to GBP38.8m (2022: GBP33.3m). Advisory services revenue reduced to GBP8.2m (2022: GBP9.1m), reflecting a strong comparative period (which benefitted from a number of contingent fees) and an anticipated reduction in corporate transactions (M&A and other capital investment).
Segmental profits for the period increased by 7% to GBP11.4m (2022: GBP10.7m). Divisional operating margins reduced slightly overall to 24.2% (2022: 25.2%), with improved insolvency margins offset by lower margins from financial advisory (compared to the strong comparative noted above and due to a quieter market).
Insolvency market
The number of corporate insolvencies in the 12 months ended 30 September 2023(1) increased to 24,326 (2022: 20,742). This increase in volume has largely been from increased liquidations, both voluntary and compulsory, which typically represent insolvencies of smaller companies. Administration volumes (which typically involve larger and more complex instructions) have also increased over the last year and are approaching pre-pandemic levels.
(1.) (Source: The Insolvency Service quarterly statistics on the number of corporate insolvencies in England and Wales on a seasonally adjusted basis for the 12 months ended 30 September)
Operating review
Our insolvency teams have experienced increased demand in the period, reflecting activity levels across the market as corporate distress levels continue to increase. We have maintained our market leading position (by volume) as we continue to see the benefits of our national office network. The increased activity has resulted in revenue growth of 17% in the period and our order book now stands at GBP35.0m (October 2022: GBP33.9m, April 2023: GBP35.2m).
As a result of the continuing increase in demand we have continued to invest in growing our team, which has increased FTE numbers by 12% over the last 12 months (6% since the start of the financial year), ensuring we retain the headroom to handle a further increase in activity levels.
In addition in September 2023, we acquired the Cardiff-based insolvency team from Jones Giles & Clay, who have joined our existing Cardiff insolvency team.
Across our mix of financial advisory services we continue to deliver a resilient performance with advice provided on refinancing and restructuring solutions mitigating the anticipated reduction in capital transactions (M&A and other capital investment).
Property advisory and transactional services
Financial summary
Revenue in the period increased by 17% (4% organic) to GBP18.9m (2022: GBP16.1m), reflecting the resilient range of services and expertise which continues to provide a solid platform for growth.
Segmental profits for the period increased by 32% to GBP3.7m (2022: GBP2.8m), with operating margins improved to 19.6% (2022: 17.4%).
Operating review
Financial performance in the period reflects our breadth of expertise and services, which has enabled the business to grow regardless of the headwinds in the broader UK commercial real estate sector.
The valuations team, who predominantly provide services to lenders, benefitted from the depth of their expertise and reputation. Instruction levels in the period have been driven by revaluations and loan security reviews which have offset reduced instructions for new loan valuations. We have continued to invest in the team through the acquisition of Andrew Forbes in November 2023 (following the period end). This has extended our regional presence across the South West and increased the size of our national valuations team to over 100 colleagues.
The auctions team had a successful six months with increased volumes from the sale of property, plant and machinery. The increase in auction sales has partially mitigated weaker transactional markets in both commercial property and business sales agency.
Our building consultancy team, delivering projects and development activity, continued to expand in the period, with increased activity levels across a broad client base. Our asset management and insurance teams had a robust six months.
At the start of the new financial year we acquired Banks Long & Co, a multi-disciplinary chartered surveyors practice. The team provides commercial property agency, property management, building consultancy and valuation services and the acquisition has developed our regional offering across Lincolnshire and Humberside. Integration is proceeding well with trading performance in line with expectations.
FINANCE REVIEW
Financial summary
6 months 6 months 12 months
to 31 Oct to 31 Oct to 30 Apr
2023 2022 2023
GBPm GBPm GBPm
Revenue 65.9 58.5 121.8
------------------------------------------ ---------- ---------- ----------
Adjusted EBITDA 12.8 11.9 26.6
Share-based payments (0.2) (0.7) (1.3)
Depreciation (1.9) (1.7) (3.5)
------------------------------------------ ---------- ---------- ----------
Operating profit (before transaction
costs and amortisation) 10.7 9.5 21.8
Finance costs (0.8) (0.5) (1.1)
------------------------------------------ ---------- ---------- ----------
Adjusted profit before tax 9.9 9.0 20.7
Transaction costs (3.9) (0.8) (8.4)
Amortisation of intangible assets arising
on acquisitions (3.0) (3.2) (6.3)
------------------------------------------ ---------- ---------- ----------
Profit before tax 3.0 5.0 6.0
Tax on profits on ordinary activities (1.8) (1.3) (3.1)
------------------------------------------ ---------- ---------- ----------
Profit for the period 1.2 3.7 2.9
------------------------------------------ ---------- ---------- ----------
Operating result (before transaction costs and amortisation)
Revenue in the period increased by GBP7.4m to GBP65.9m (2022: GBP58.5m), an overall increase of 13% (8% organic, 5% acquired).
Adjusted EBITDA increased to GBP12.8m (2022: GBP11.9m) with non-cash costs (share-based payments and depreciation) decreasing to GBP2.1m (2022: GBP2.4m), due to lower share-based payment charges.
Operating performance by segment is detailed below:
Revenue (GBPm) Operating profit
(GBPm)
2023 2022 growth 2023 2022 growth
------------------------------------- ----- ----- -------- ------ ------ -------
Business recovery and financial
advisory 47.0 42.4 11% 11.4 10.7 7%
Property advisory and transactional
services 18.9 16.1 17% 3.7 2.8 32%
Shared and central costs - - - (4.4) (4.0) 10%
------------------------------------- ----- ----- -------- ------ ------ -------
Total 65.9 58.5 13% 10.7 9.5 13%
------------------------------------- ----- ----- -------- ------ ------ -------
Shared and central costs increased to GBP4.4m principally due to investment in the group's IT and HR capability but remained broadly unchanged as a percentage of revenue at 6.7% (2022: 6.8%).
Operating margins were unchanged at 16.2% (2022: 16.2%).
Finance costs increased to GBP0.8m (2022: GBP0.5m) resulting from higher IFRS 16 interest costs (due to new property leases commencing in the period) and the increased cost of the group's borrowing facilities due to higher interest rates.
Adjusted profit before tax increased by 10% to GBP9.9m (2022: GBP9.0m).
Transaction costs
Transaction costs arise due to acquisitions in accordance with IFRS 3 and include the following:
-- Acquisition consideration where the vendors have obligations in the sale and purchase agreement to provide post-acquisition services for a fixed period (deemed remuneration in accordance with IFRS 3). This consideration is charged to profit over the period of service;
-- Gains on acquisitions, where the fair value of assets acquired exceeds the consideration under IFRS 3; and
-- Legal and professional fees incurred on acquisitions.
These costs (detailed in note 3) increased to GBP3.9m (2022: GBP0.8m), reflecting acquisition consideration from both current and prior year acquisitions of GBP4.5m (2022: GBP5.4m), acquisition costs of GBP0.1m (2022: GBP0.3m), partially offset by a gain on acquisition of GBP0.7m (2022: GBP4.9m).
Tax
The overall tax charge for the period was GBP1.8m (2022: GBP1.3m) as detailed below:
2023 2022
Profit Tax Profit Effective Profit Tax Profit Effective
before after rate before after rate
tax tax tax tax
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
Adjusted 9.9 (2.6) 7.3 26% 9.0 (1.9) 7.1 21%
Transaction
costs (3.9) - (3.9) - (0.8) - (0.8) -
Amortisation (3.0) 0.8 (2.2) 25% (3.2) 0.6 (2.6) 19%
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
Tax on ordinary
activities 3.0 (1.8) 1.2 60% 5.0 (1.3) 3.7 26%
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
The adjusted tax rate of 26% is based on the expected rate for the full year, with the increase from the comparative period due to the increased UK headline rate.
Earnings per share
Adjusted diluted earnings per share(1) was 4.6p (2022: 4.4p), reflecting increased UK corporation tax rates in the period. Diluted earnings per share was 0.8p (2022: 2.3p).
(1. See reconciliation in note 5)
Partners and employees
The average number of full-time equivalent (FTE) partners and employees working in the group over the period increased due to both acquisitions and organic investment.
2023 2022
Insolvency Property Shared Total Insolvency Property Shared Total
and advisory advisory and and advisory and
services and support advisory and support
transactional teams services transactional teams
services services
------------- -------------- ----------------- --------- ------ ----------- ----------------- --------- ------
Fee earners 566 320 - 886 506 289 - 795
Support
teams 54 11 100 165 64 7 92 163
------------- -------------- ----------------- --------- ------ ----------- ----------------- --------- ------
Total 620 331 100 1,051 570 296 92 958
------------- -------------- ----------------- --------- ------ ----------- ----------------- --------- ------
The ratio of our support teams to fee earning partners and employees is 5.4 (Apr 2023: 5.4, October 2022: 4.9).
Financing
The group has maintained a robust financial position with net cash of GBP1.1m as at 31 October 2023 (30 April 2023: net cash GBP3.0m, 31 October 2022: net debt GBP2.4m), having made GBP4.0m of acquisition and deferred consideration payments in the period (net of cash acquired).
We have significant levels of headroom within our bank facilities which are committed until August 2025 and comprise a GBP25m unsecured, committed revolving credit facility and a GBP5m uncommitted acquisition facility. During the period, all bank covenants were comfortably met.
Cash flow in the period is summarised as follows:
6 months 6 months 12 months
GBPm to to to 30 Apr
31 Oct 2023 31 Oct 2022 2023
Adjusted EBITDA 12.8 11.9 26.6
Working capital (4.6) (4.8) (2.8)
Cash from operating activities (before
acquisition consideration payments(1)
) 8.2 7.1 23.8
Tax (1.8) (3.2) (5.3)
Interest (0.9) (0.4) (1.1)
Capital expenditure (0.8) (0.3) (1.0)
Capital element of lease payments (0.7) (1.4) (2.3)
--------------------------------------- ------------ ------------ ----------
Free cash flow 4.0 1.8 14.1
Acquisition payments (net of cash
acquired)(2) (4.0) (7.4) (10.6)
Net proceeds from share issues - 0.2 0.2
Dividends (1.9) (1.7) (5.4)
Net cash outflow (1.9) (7.1) (1.7)
--------------------------------------- ------------ ------------ ----------
(1. Acquisition consideration payments accounted for as deemed remuneration in accordance with IFRS3)
2. Acquisition consideration payments (defined above), acquisition costs and contingent consideration payments net of cash acquired
Cash from operating activities (before acquisition consideration payments) was GBP8.2m (2022: GBP7.1m) due to increased EBITDA of GBP0.9m. Working capital absorption was broadly in line with the comparative period. Tax payments were GBP1.8m (2022: GBP3.2m, including GBP1.0m of accelerated payments).
Free cash flow in the period was GBP4.0m (2022: GBP1.8m).
Acquisition payments (net of cash acquired) in the period were GBP4.0m (2022: GBP7.4m) comprising: the acquisition of Banks Long GBP0.8m (2022: Mantra Capital (GBP4.7m) and Budworth Hardcastle (GBP0.5m)), contingent payments in respect of prior year acquisitions of GBP3.1m (2022: GBP1.9m) and acquisition costs GBP0.1m (2022: GBP0.1m).
Net assets
Net assets as at 31 October 2023 were GBP80.2m, compared to GBP84.3m as at 30 April 2023. The movement represents an increase of GBP7.3m from post-tax adjusted earnings and GBP0.6m from the issue of new shares; offset by dividends of GBP5.9m and the post-tax impact of acquisition-related transaction and amortisation costs of GBP6.1m.
Ric Traynor Nick Taylor
Executive chairman Group finance director
11 December 2023 11 December 2023
Consolidated statement of comprehensive
income
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
--------------------------------------- ----- ------------ ------------ ---------- Revenue 2 65,859 58,457 121,825 Direct costs (38,096) (32,743) (67,700) --------------------------------------- ----- ------------ ------------ ---------- Gross profit 27,763 25,714 54,125 Other operating income 385 142 208 Administrative expenses (24,262) (20,363) (47,178) --------------------------------------- ----- ------------ ------------ ---------- Operating profit before amortisation and transaction costs 2 10,699 9,473 21,821 Transaction costs 3 (3,830) (828) (8,440) Amortisation of intangible assets arising on acquisitions (2,983) (3,152) (6,226) --------------------------------------- ----- ------------ ------------ ---------- Operating profit 3,886 5,493 7,155 Finance costs 4 (845) (503) (1,170) --------------------------------------- ----- ------------ ------------ ---------- Profit before tax 3,041 4,990 5,985 Tax on profits on ordinary activities (1,822) (1,269) (3,074) --------------------------------------- ----- ------------ ------------ ---------- Profit and total comprehensive income for the period 1,219 3,721 2,911 --------------------------------------- ----- ------------ ------------ ---------- Earnings per share Basic 5 0.8p 2.4p 1.9p Diluted 5 0.8p 2.3p 1.8p --------------------------------------- ----- ------------ ------------ ----------
All of the profit and comprehensive income for the period is attributable to equity holders of the parent.
Consolidated statement of changes in equity
For the six months ended 31 October Share Share Merger Capital Retained Total
2023 (unaudited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2023 7,727 29,973 27,944 304 18,392 84,340
Total comprehensive income for
the period - - - - 1,219 1,219
Dividends - - - - (5,944) (5,944)
Shares issued as consideration
for acquisitions 14 - 361 - - 375
Credit to equity for equity-settled
share-based payments - - - - 7 7
Other share options 135 46 - - - 181
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 31 October 2023 7,876 30,019 28,305 304 13,674 80,178
------------------------------------- --------- --------- --------- ------------ ---------- --------
For the six months ended 31 October Share Share Merger Capital Retained Total
2022 (unaudited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2022 7,671 29,787 27,172 304 19,591 84,525
Total comprehensive income for
the period - - - - 3,721 3,721
Dividends - - - - (5,387) (5,387)
Shares issued as consideration
for acquisitions 28 - 772 - - 800
Credit to equity for equity-settled
share-based payments - - - - 744 744
Other share options 14 156 - - - 170
At 31 October 2022 7,713 29,943 27,944 304 18,669 84,573
------------------------------------- --------- --------- --------- ------------ ---------- --------
For the year ended 30 April 2023 Share Share Merger Capital Retained Total
(audited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2022 7,671 29,787 27,172 304 19,591 84,525
Total comprehensive income for
the period - - - - 2,911 2,911
Dividends - - - - (5,387) (5,387)
Credit to equity for equity-settled
share-based payments - - - - 1,277 1,277
Shares issued as consideration
for acquisitions 28 - 772 - - 800
Other share options 28 186 - - - 214
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 30 April 2023 7,727 29,973 27,944 304 18,392 84,340
------------------------------------- --------- --------- --------- ------------ ---------- --------
Consolidated balance sheet
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
------------------------------- ----- -------------- ------------- -----------
Non-current assets
Intangible assets 71,000 76,273 73,386
Property, plant and equipment 2,164 1,980 1,993
Right of use assets 9,664 5,400 7,751
Trade and other receivables 7 4,763 7,439 5,200
------------------------------- ----- -------------- ------------- -----------
87,591 91,092 88,330
------------------------------- ----- -------------- ------------- -----------
Current assets
Trade and other receivables 7 60,237 54,976 55,550
Cash and cash equivalents 8,061 7,551 8,001
68,298 62,527 63,551
------------------------------- ----- -------------- ------------- -----------
Total assets 155,889 153,619 151,881
------------------------------- ----- -------------- ------------- -----------
Current liabilities
Trade and other payables 8 (46,131) (40,402) (42,644)
Current tax liabilities (1,970) (707) (1,110)
Lease liabilities (2,181) (1,009) (1,554)
Provisions (1,091) (1,249) (1,006)
(51,373) (43,367) (46,314)
------------------------------- ----- -------------- ------------- -----------
Net current assets 16,925 19,160 17,237
------------------------------- ----- -------------- ------------- -----------
Non-current liabilities
Borrowings (7,000) (10,000) (5,000)
Lease liabilities (8,244) (4,960) (6,658)
Provisions (2,265) (2,292) (2,139)
Deferred tax (6,829) (8,427) (7,430)
------------------------------- ----- -------------- ------------- -----------
(24,338) (25,679) (21,227)
------------------------------- ----- -------------- ------------- -----------
Total liabilities (75,711) (69,046) (67,541)
------------------------------- ----- -------------- ------------- -----------
Net assets 80,178 84,573 84,340
------------------------------- ----- -------------- ------------- -----------
Equity
Share capital 7,876 7,713 7,727
Share premium 30,019 29,943 29,973
Merger reserve 28,305 27,944 27,944
Capital redemption reserve 304 304 304
Retained earnings 13,674 18,669 18,392
------------------------------- ----- -------------- ------------- -----------
Equity attributable to owners
of the company 80,178 84,573 84,340
------------------------------- ----- -------------- ------------- -----------
Consolidated cash flow statement
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
-------------------------------------- ----- -------------- ------------- -----------
Cash flows from operating activities
Cash generated by operations 9 3,855 (970) 13,218
Income taxes paid (1,924) (3,216) (5,328)
Interest paid on borrowings (512) (274) (668)
Interest paid on lease liabilities (347) (199) (408)
-------------------------------------- ----- -------------- ------------- -----------
Net cash from operating activities
(before acquisition consideration
payments) 5,338 3,464 17,413
Acquisition consideration payments
which are deemed remuneration
under IFRS 3 (4,266) (8,123) (10,599)
-------------------------------------- ----- -------------- ------------- -----------
Net cash from operating activities 1,072 (4,659) 6,814
-------------------------------------- ----- -------------- ------------- -----------
Investing activities
Purchase of intangible fixed
assets - (18) (56)
Purchase of property, plant and
equipment (756) (309) (931)
Proceeds on disposal of property,
plant and equipment - - 20
Acquisition of businesses (305) (327) (809)
Deferred consideration payments - - (325)
Net cash acquired in acquisition
of businesses 575 1,055 1,158
-------------------------------------- ----- -------------- ------------- -----------
Net cash from investing activities (486) 401 (943)
-------------------------------------- ----- -------------- ------------- -----------
Financing activities
Dividends paid (1,854) (1,687) (5,387)
Net proceeds on issue of shares 31 170 213
Repayment of obligations under
leases (703) (1,359) (2,381)
Drawdown of loans 2,000 5,000 -
Net cash from financing activities (526) 2,124 (7,555)
-------------------------------------- ----- -------------- ------------- -----------
Net increase (decrease) in cash
and cash equivalents 60 (2,134) (1,684)
Cash and cash equivalents at
beginning of period 8,001 9,685 9,685
-------------------------------------- ----- -------------- ------------- -----------
Cash and cash equivalents at
end of period 8,061 7,551 8,001
-------------------------------------- ----- -------------- ------------- -----------
1. Basis of preparation and accounting policies
(a) Basis of preparation
The half year condensed consolidated financial statements do not include all of the information and disclosures required for full annual financial statements and should be read in conjunction with the group's annual financial statements as at 30 April 2023, which have been prepared in accordance with IFRSs as adopted by the European Union.
This condensed consolidated half year financial information does not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 30 April 2023 were approved by the board of directors on
10 July 2023 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not include a reference to any matters to which the auditor 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.
The directors have reviewed the financial resources available to the group and have concluded that the group is a going concern. This conclusion is based upon, amongst other matters, a review of the group's financial projections for a period of twelve months following the date of this announcement, together with a review of the cash and committed borrowing facilities available to the group. Accordingly, the going concern basis has been used in preparing these half year condensed consolidated financial statements.
The condensed consolidated financial statements for the six months ended 31 October 2023 have not been audited nor subject to an interim review by the auditors. IAS 34 'Interim financial reporting' is not applicable to these half year condensed consolidated financial statements and has therefore not been applied.
(b) Significant accounting policies
The accounting policies adopted in preparation of the half year condensed consolidated financial statements are consistent with those followed in the preparation of the group's annual financial statements for the year ended 30 April 2023.
2. Segmental analysis by class of business
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------ -------------- ------------- -----------
Revenue
Business recovery and financial advisory 46,993 42,350 89,696
Property advisory and transactional
services 18,866 16,107 32,129
------------------------------------------ -------------- ------------- -----------
65,859 58,457 121,825
------------------------------------------ -------------- ------------- -----------
Operating profit before amortisation
and transaction costs
Business recovery and financial advisory 11,391 10,652 23,999
Property advisory and transactional
services 3,681 2,829 5,692
Shared and central costs (4,373) (4,008) (7,870)
------------------------------------------ -------------- ------------- -----------
10,699 9,473 21,821
------------------------------------------ -------------- ------------- -----------
3. Transaction costs
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------------ -------------- ------------- -----------
Acquisition consideration (deemed remuneration
in accordance with IFRS 3) 4,514 5,425 12,304
Acquisition costs 61 327 434
Gain on acquisition (745) (4,924) (4,298)
3,830 828 8,440
------------------------------------------------ -------------- ------------- -----------
4. Finance costs
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------------- -------------- ------------- -----------
Interest on bank loans 498 303 762
Finance charge on lease liabilities 317 161 343
Finance charge on dilapidations provisions 30 39 65
-------------------------------------------- -------------- ------------- -----------
845 503 1,170
-------------------------------------------- -------------- ------------- -----------
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------------- -------------- ------------- -----------
Earnings
Profit for the period attributable to
equity holders 1,219 3,721 2,911
--------------------------------------- -------------- ------------- -----------
31 October 31 October 30 April
2023 (unaudited) 2022 2023 (audited)
(unaudited)
number number number
'000 '000 '000
-------------------------------------------- ------------------ ------------- ----------------
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 158,076 155,962 155,634
Effect of dilutive potential ordinary
shares:
Share options 1,611 6,054 6,423
Contingent shares - - 233
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 159,687 162,016 162,290
-------------------------------------------- ------------------ ------------- ----------------
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
pence pence pence
---------------------------- -------------- ------------- -----------
Basic earnings per share 0.8 2.4 1.9
Diluted earnings per share 0.8 2.3 1.8
---------------------------- -------------- ------------- -----------
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, as they exclude the accounting charges which arise due to acquisitions in accordance with IFRS 3 and are not influenced by the day-to-day operations of the group.
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------- -------------- ------------- -----------
Earnings
Profit for the period attributable to
equity holders 1,219 3,721 2,911
Amortisation of intangible assets arising
on acquisitions 2,983 3,152 6,226
Transaction costs 3,830 828 8,440
Tax effect of above items (746) (615) (1,236)
Adjusted earnings 7,286 7,086 16,341
------------------------------------------- -------------- ------------- -----------
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2023 2022 2023
(unaudited) (unaudited) (audited)
pence pence pence
------------------------------------- -------------- ------------- -----------
Adjusted basic earnings per share 4.6 4.5 10.5
Adjusted diluted earnings per share 4.6 4.4 10.1
------------------------------------- -------------- ------------- -----------
6. Dividends
The interim dividend of 1.3p (2022: 1.2p) per share (not recognised as a liability at 31 October 2023) will be payable on 7 May 2024 to ordinary shareholders on the register at 12 April 2024. The final dividend of 2.6p per share as proposed in the 30 April 2023 financial statements and approved at the group's AGM was paid on 3 November 2023 and was recognised as a liability at 31 October 2023.
7. Trade and other receivables
31 October 31 October 30 April
2023 (unaudited) 2022 2023 (audited)
(unaudited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------------ ------------- ----------------
Non current
Deemed remuneration 4,763 7,439 5,200
------------------------------- ------------------ ------------- ----------------
Current
Trade receivables 11,448 11,847 11,652
Unbilled income 41,552 35,735 37,489
Other debtors and prepayments 3,970 4,019 2,987
Deemed remuneration 3,267 3,375 3,422
------------------------------- ------------------ ------------- ----------------
60,237 54,976 55,550
------------------------------- ------------------ ------------- ----------------
8. Trade and other payables
31 October 31 October 30 April
2023 (unaudited) 2022 2023 (audited)
(unaudited)
GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ ------------- ----------------
Current
Trade payables 2,672 1,450 2,055
Accruals 9,761 8,698 10,454
Final dividend 4,090 3,700 -
Other taxes and social security 5,197 4,406 5,209
Deferred income 6,998 5,799 6,503
Other creditors 14,059 14,161 14,350
Deferred consideration 13 246 13
Deemed remuneration liabilities 3,341 1,942 4,060
--------------------------------- ------------------ ------------- ----------------
46,131 40,402 42,644
--------------------------------- ------------------ ------------- ----------------
9. Reconciliation to the cash flow statement
31 October 31 October 30 April
2023 (unaudited) 2022 2023 (audited)
(unaudited)
GBP'000 GBP'000 GBP'000
------------------------------------------------- ------------------ ------------- ----------------
Profit for the period 1,219 3,721 2,911
Adjustments for:
Tax 1,822 1,269 3,074
Finance costs 845 503 1,170
Amortisation of intangible assets 3,071 3,243 6,410 Depreciation of property, plant and equipment 596 536 1,114 Depreciation of right of use assets 1,246 1,096 2,136 Gain on acquisition (744) (4,924) (4,298) Acquisition costs 61 327 434 Profit on disposal of property, plant and equipment - - (13) Loss on disposal of right of use asset - - 42 Share-based payment expense 157 745 1,277 Deemed remuneration obligations settled through equity 375 800 800 Decrease (increase) in deemed remuneration receivable 592 (3,962) (1,769) (Decrease) increase in deemed remuneration liabilities (719) 464 2,675 Operating cash flows before movements in working capital 8,521 3,818 15,963 Increase in receivables (4,364) (3,428) (4,656) (Decrease) increase in payables (199) (1,337) 2,480 Increase (decrease) in provisions (103) (23) (569) Cash generated by operations 3,855 (970) 13,218 ------------------------------------------------- ------------------ ------------- ----------------
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END
IR NKKBNOBDDPBD
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December 11, 2023 02:00 ET (07:00 GMT)
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