Begbies Traynor Share Discussion Threads

[rimau1] 17/11/2022 07:38

Reassuring update. Trading in line with expectations so we can still expect £20m pbt this year which puts BEG on about 13x earnings versus a historical average of 15x as we begin to see efficiency savings and operational leverage from the recent acquisitions. Evidenced by being No1 in the national insolvency market. Moved to a net debt position due to earn outs on 2021’s acquisition spree so no surprises there. Steady as she goes with a useful 3% dividend yield.

[this_is_me] 17/11/2022 07:26

Momentum starting to build as zombie companies start to fail following withdrawal of covid support packages.

[steadyaway1] 16/11/2022 09:14

Uk inflation higher than expected... so rates higher for longer etc... Yes increases notional risk free rate (although my guess that is US 10 year now in any event) but surely that boosts demand for insolvency services by more? Clearly still value to be had here given the tight labour market (caused in part by Brexit) keeping rates higher for longer than many other countries...

[steadyaway1] 11/11/2022 08:16

Fairly sedate FRP update this morning. It's not yet seen a material pick up in big admins, but CVLs are high. Decent CF work and pipeline and no upgrades. Read across for BEG with more of the bread and butter being CVLs and blue sky trading admins being a nice to have (rather than core like FRP) then would expect a little more positivity from BEG but who knows. Either way.... personal view is that admins are gathering pace quickly now with economy entering recession with no new bail outs expected.

[2bluelynn] 10/11/2022 17:12

Knew this was about to blow after it for over £1.30 on weeds and upwards

[2bluelynn] 09/11/2022 16:15

It's popped £1.30 at last

[daneswooddynamo] 03/11/2022 16:57

The share price performance relative to frp is a bit dull, ripe for a catch up imo

[edmundshaw] 03/11/2022 14:22

Yes, Ric Traynor is a major shareholder. Nick Fry is also sitting on 1,000,000 share options (exercise price at 36.7p) and Nick Taylor 416,300 of the same. That doesn't seem like low share ownership to me - quite often FDs have surprisingly small holdings in their listed companies...

[chessmaster10] 29/10/2022 18:31

Hi route1,

Thanks for the reply, and I appreciate your bullish take.

To be fair, I've had another look at the major shareholders and Ric Traynor holds 17.63% of the shares issued, so he does have significant skin in the game.

It seems no other director holds more than 3.4% of the shares, and the last outright buys were in 2020, although some options have been exercised since.

They do seem to be on an upwards trajectory, increasing revenues at an accelerating rate - but that needs to convert to consistently increasing operating profit and EPS for the share price to really take off IMO.

Looking forward to the half year report on Dec 12th.

[route1] 27/10/2022 02:42

Hi, chessmaster10,I have read your post with great interest.As a long term holder of Begbies, I have absolutely no concerns about their future trajectory.I have learnt after living in the "lonely land of the self employed ", for many years, that having the support of a competent accountancy practice is in my view, ESSENTIAL, regardless of the cost, which is offset on the return as just one more expense, like all the others.Nowadays, having been retired in Asia,for more than 15 years, Begbies, is a main component of my portfolio.With the world economy going through Seismic changes, on an almost daily basis,I believe that Begbies services will continue to be in extremely high demand

[route1] 25/10/2022 05:05

Thanks for the clarification, as they say a day is a long time in politics, and now that the Downing Street pest control unit has done an excellent job, it remains to be seen if Rishi can stop this rudderless ship from sinking by taking several dynamic steps in the right direction.Wether his future actions will have a positive or negative effect on the sp, remains to be seen.

[steadyaway1] 24/10/2022 08:27

Sorry.... wasn't clear. "Go Truss" was a sarcastic show of support for her "growth" agenda

[chessmaster10] 23/10/2022 16:38

Hi all. Been holding begbies for a while now, and I'm expecting this to do well over the next couple of years.

This recent drop looks like a technical drop to fill a gap, and to retest the last breakout level. With that done, and insolvencies increasing, we should start moving higher. My target is 180p+, possibly a retest of historical highs at 200p.

However, I have some doubts.

The lack of director buys and collectively their low share ownership seems like a red flag. Any thoughts on this?

I also think sentiment could turn quickly negative here, if it looks like the economy is recovering faster than expected and inflation comes down. Conversely, if we drop into recession it could give the share price a boost.

On balance, I'm bullish, but with some caution.

[route1] 20/10/2022 15:44

I'm not sure if you mean Truss should go, she has gone now, or you mean go for it Lizzie? Either way the Country needs certainty and stability ASAP!!!

[steadyaway1] 20/10/2022 09:52

This could be a really strong performer post interest rates peaking.... the risk free rate starting to come down for valuation purposes, coupled with increasing unemployment rates and corporate distress (they won't be putting rates down till that happens, need more slack in economy to kill wage price spiral) bumping up revenue in what will be a protracted period of higher taxes needed to balance books / hold back recovery. Go Truss!

[the bolton wanderer] 14/10/2022 18:22

I've added a few more today.
It still looks great value under 1.30.

[2bluelynn] 14/10/2022 14:29

A couple of massive buys just hit the book

[rimau1] 13/10/2022 14:30

Apatel, fair challenge. All i would say is that the structure of the most recent deal protects BEG since it was heavily weighted towards earn-outs in years 2-4 based on aggressive pbt growth targets being met. i think we paid £4.5m cash and some stock upfront for £1m historic pbt. Clearly brokerage finance is likely to have a tough Q4 (at least!!) but it still remains a small slice of the pie. Maybe the next acquisition will be on even better terms and Beg averages down but it does feel like a national brokerage financial services offering is a key part of the long term strategy here.

[apatel21] 13/10/2022 10:39

Rimau1You make some excellent points about diversification and having a business that benefits when there is good economic growth.I just question the timing of it - surely it would have been better to have waited and looked to buy towards the bottom of property cycle rather than the top.

[rimau1] 13/10/2022 08:06

Interesting comments all round, i added again yday and today i think we are on a forward multiple of 11x with a useful3% dividend which is too cheap. I’m ok with growing the property services side, its complimentary (restructuring advice/rent collections/auctions/surveying) and BEG needs to continue to diversify so that it can grow in good times as well as tough times. We can’t be a pure counter cyclical play as we all know the good times historically last much longer than the bad times.

[2bluelynn] 12/10/2022 15:15

Filled the gap on the chart which is good .... Hate gaps on a chart always get filled so better to get it out of the way so we can move upwards

[apatel21] 12/10/2022 09:01

I think it's to do with the fact they have just bought a property finance brokerage Co. just as the property market is about to crash!