Begbies Traynor Share Discussion Threads

[britgoneabroad2] 04/1/2012 15:30

You buying again Mr Paulypilot ?

[bonio10000] 15/12/2011 14:24

The issue is the market.

The other half works in insolvency and the number of appointments is still declining and work is slow. Seems to be mirrored with what she hears from other firms and lawyers in the industry.

Despite predictions of doom and gloom, this does not appear to be translating into work.

A lot of companies have no assets left and so IPs are unwilling to take them on as there is nothing to cover fees.

All imho and dyor.

[crawfish123] 15/12/2011 14:21

Good results? not sure if i would describe them as that.
Inline with what was expected: yes, but still horrific reading. Looks like they might break even for the year, as long as no further horror stories occur.

I am hoping this is a turning point for the firm. Finally trying to put this tax division horror story behind them.

As I see it the management have spent all the bucket loads of cash produced by this firm on buying work, buying small firms and supporting the tax division. As can be expected when buying people businesses this has been incredibly poor value for the shareholders. I have an uncomfortable feeling when a firm needs to keep buying others to maintain revenue.

The earnings of the tax division deteriorated further in the half year, poor old Williams who are buying. They must have some plan in place to do something with it.

This report shows the cash eaten up by getting rid of the tax division. They are still buying companies/work...this time in Scotland. They may have seen this as good value but under the cash-strapped circumstances is it appropriate?

Also still further 'restructuring' in the main division, seems like restructuring is a continual drain on resources. When will this end? The strategy has been: Buy firms/work (people) with cash, restructure your older bits (firing people) using cash, borrow more cash.

At least they seem to have got back to the core profitable business, which has had the resources aligned with the market demand. This as I have always thought is a good business. Beg just needs a couple of years without a drain of the tax division, dividends or buying work/firms, to get back on track. At this low level of insolvency numbers the main division is turning in the equivalent of 5p eps a year. At a sensible 8p/e this would be 40p. at the current bid price of 28p this looks like an opportunity to buy in with significant upside.
I'm holding with a book cost at around 42p.
With any increase in insolvencies eps could reach 6-7p meaning 50-60+p share price eventually.

[clocktower] 15/12/2011 12:09

Good results but what will they not do too:

"maximising the performance of the core businesses."

[still waiting] 08/12/2011 10:50

following TNO, anything connected to sme servicing is being hammered.

[bonio10000] 08/12/2011 10:42

Looks like it is going to retest the all time low after the recent "Great" news.

[bonio10000] 29/11/2011 07:38

Well - the management you are praising for selling it, they are the ones who purchased it.

And don't even mention red flag.

[nigelpm] 28/11/2011 22:17

No, it shows that tax wasn't a core part of the business and they aren't interested in it.

If you don't like it sell your shares.

[bonio10000] 28/11/2011 22:07

What does that prove? That they still didn't lose a lot on those acquisitions?

And as for focus....it is a £7m t/o business.

If that was really taking focus away, they need some people who can really manage a mid tier firm. It's hardly walking into RBS.

[nigelpm] 28/11/2011 21:50

Worth reading the comment :


"We are pleased to have secured the sale of this non-core business in line with our strategy. We believe it will be better taken forward under Smith & Williamson's ownership, given their strength within the tax market.

"Today's sale will enable the Group to focus on its two core businesses (insolvency and global risk partners) to enhance their market positions and take advantage of growth opportunities in their respective markets."


Quite clear to me.

[bonio10000] 28/11/2011 21:40

jeez - so basically they are getting nothing for the tax division.

I presume they spent more than £7m on it, if £7m is simply the carrying value in the accounts.

And they only made £0.1m EBITDA on turnover of £7m from the division last year?

Man alive.

[bonio10000] 23/11/2011 10:59

?

Sort out the core business first. Not trying to earn a few pennies here or there selling property.

[spaceparallax] 23/11/2011 09:14

a neat idea

[bonio10000] 23/11/2011 08:22

will this new website be another Red Flag?

[paulypilot] 04/11/2011 12:24

They're getting rid of Red Flag & Tax because they don't make any profit!
As a shareholder, I'm very pleased about the disposals, and don't care if they have to give them away, although any positive proceeds would be a nice bonus. Under-performing business units are a waste of management time & dilute results overall.

The rest of Begbies business makes a decent, low double-digit percentage operating profit margin, so it looks like a business in pretty good shape I would suggest. Particularly as we recently had an in-line trading statement.

Although given the overall situation with the Eurozone, etc, I think we'd all feel more comfortable with lower levels of debt. But that is reflected in the fwd PER of 4, and divi yield of about 8%. But each to their own, it's clear you don't like BEG, and that's fine, your choice.

[bonio10000] 04/11/2011 10:56

I disagree and work in the sector as well.

Businesses in good shape don't dispose of large parts of their operation, i.e. tax.

[paulypilot] 04/11/2011 10:31

bonio - BEG does not need to pay off its debt, because it's just effectively revolving credit to finance the debtor book. I used to work in this sector, and it's quite normal for the Bank to finance Administrations, and then the fees are billed at a creditors meeting, which can be some time later.

This is reinforced by the fact that, very unusually, BEG's bank facility is completely unsecured - that indicates a very relaxed attitude by the Bank! They also have plenty of headroom on their bank facility, both in terms of amount, and duration. So I just don't see BEG's debt as a problem at all (at the moment, but you never can be sure, in these strange times, banks can do strange things if they are under pressure to shrink their Balance Sheet). BEG's debt is a facility with Yorkshire Bank & HSBC, so obviously the latter are fine, but I don't know what position Yorkshire Bank are in? They are owned by an Australian Bank, so given that Australia sailed through the credit crunch without problems, one assumes it's pretty secure.

The fact remains that BEG's Bal Sheet overall is in much better shape than RSM Tenon's.

[bonio10000] 04/11/2011 09:17

Nope - collect a few debtors and 12-18 months profits and debt free.

Beg will take far longer to pay its debt off.

[paulypilot] 04/11/2011 01:33

I disagree bonio. Tenon's Bal Sheet is far more highly geared, once you strip out worthless intangibles. Begbies debt just finances its debtor book, which is fine.

[bonio10000] 23/10/2011 09:41

?

Far worse than Tenon. Higher debt considering profits and a business reliant on one sector that even their own "Red Flag Report" says is improving in the biggest market, i.e. London and South East.

[paulypilot] 22/10/2011 22:56

From following the Level 2 every day, it looks to me like the big seller has finally finished now. Hopefully this means that the amazing value will pull the share price back up again. This is now one of my biggest long positions, and am not even going to think about selling at less than 60p/share. It's far better value than RSM Tenon, because Bal Sheet much better, and similarly ultra-low PER.

[qs9] 22/10/2011 13:03

Looks very promising, unusual 10% rise on Friday all of a sudden, perhaps something in the "offing"? If results keep moving in the right direction, then a retrace to the 50s IMO is possible.

[britgoneabroad2] 20/10/2011 11:35

Is the bleeding over ?

[spaceparallax] 20/10/2011 09:40

A good share price revival of late

[hieronymous1] 04/10/2011 23:00

Still yesterday here in the UK!

Probably.

This cretinous idea of an SME bank floated by Osborne at the Tory Party Conference has not helped our company. The idea will not amount to anything for two main reasons. One, the politicians will never get involved in state lending for risky businesses which are the ones that need the money. You can hear the howls about "another ground nuts scheme" and "no more lamed ducks" already. Two, the SMEs are not in the main asking for loans because they have no confidence in the economy. They can see that public investment is being slashed and public sector jobs are being slashed. Would you risk expanding your business in such a climate? A high proportion of firms have either government or the soon to be unemployed as customers.

It will just take a while for reality to sink in.