Begbies Traynor Share Discussion Threads

[jonwig] 30/1/2019 16:20

edmundshaw - yes, Stockopedia is a useful first stage in filtering out 'time-wasters', not a tool to pursue much further. Aleman - that's interesting, but looks like an expensive fixed charge, hence big operational gearing. I'd want to know more about that.

[aleman] 30/1/2019 16:19

That did not take long! Https://www.investorschronicle.co.uk/shares/2019/01/30/news-tips-apple-lse-wizz-air-more/ Good news for insolvency practitioner Begbies Traynor (BEG) is rarely good news for the rest of UK plc. This morning, the group is out with its latest 'red flag' report, which suggests that the number of businesses in significant financial distress jumped by almost 15,000 in the fourth quarter of 2018. Sectors hit particularly hard by what Begbies described as Brexit-linked economic uncertainty include real estate and property, while the number of businesses in "critical" financial distress are up 25 per cent in a year. We remain buyers. And also: Https://www.stockopedia.com/content/small-cap-value-report-wed-30-jan-2019-cas-sal-auk-call-beg-yu-botb-tap-441678/

[aleman] 30/1/2019 16:17

A nice run of buying, today. Is it existing investors that understand the implications of this week's insolvency numbers or have BEG been tipped somewhere again? I shall have a look around.

[aleman] 30/1/2019 16:10

jonwig - it sounds like it might be much more than just other accountants used to source information. Https://www.redflagalert.com/solutions-by-organisation/legal Red Flag Alert’s database is updated daily with over 40 advanced fields: Intelligence gathered from 10+market-leading data owners. Over 60,000 data changes every single day. Over 100 indicators of financial health are updated.

[edmundshaw] 30/1/2019 15:10

Quite right jonwig. In the end the first hand ones - in the Annual Report - are the only numbers you can hope to rely on...

[jonwig] 30/1/2019 12:41

Aleman - OK, thanks. This is on my "maybe buy" list. The numbers given on Stockopedia (divi, FCF, PER, book value) look attractive, but I still need to go to the first-hand ones.

[aleman] 30/1/2019 12:00

1)It can be a while between distress and administration and some admins can last a year so there can delay between entering admin and going bankrupt or arranging a CVA. I'm not sure a great deal is known due to confidentiality requirements. 2)I think I read that Red Flag's data is collected confidentially/anonymously from UK accountants.

[jonwig] 30/1/2019 09:58

From Aleman's link in #2225: Seasonally adjusted corporate insolvencies fell by 9% in Q4 2018 compared to Q3 2018, but rose by 11% compared to Q4 2017. But today's BEG RNS from their Red Flag Alert: The number of businesses in 'significant' financial distress now stands at 481,000, leaping by 15,000 during Q4 2018 Two questions - 1) presumably there's a time-lag between 'significant distress' and actual insolvency, and the first doesn't necessarily lead to the second. Is anything known about this? 2) Where do Red Flag Alert find their data? If from Companies' House, there can be a nine-month delay between year-end and publication. The FT also points out today that if there's a high amount of equipment dumped onto the market, actually clearing it during a recession won't be easy or very profitable. I'm interested because of my investment in Manolete Partners.

[aleman] 29/1/2019 16:46

More on today's numbers. Https://www.r3.org.uk/index.cfm?page=1114&element=33082&refpage=1008

[edmundshaw] 29/1/2019 15:24

Good information, thanks Aleman!

[aleman] 29/1/2019 09:57

UK individual insolvencies in Q4 leapt 35% over a year ago to reach levels of the last recession as IVAs hit a new quarterly record of 22.7k. (See Fig 10.) Corporate insolvency trends are cluttered by one-offs but the underlying trend for Q4 was a rise of 11% on a year ago from very low historical levels. (See Table3 and Figs. 5+7.) Https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/773841/Commentary.pdf It looks like BEG probably got a lot busier in Q4 and I very much doubt the economy has got any better since.

[aleman] 18/1/2019 00:21

Another year added to forecasts: Year Ending Revenue(£m) Pre-tax(£m) EPS P/E PEG EPS Growth Div Yield 2019-04-30 57.00 1.62 4.35p 14.3 1.6 9% 2.60p 4.2% 2020-04-30 58.77 2.30 4.75p 13.1 1.4 9% 2.75p 4.4% 2021-04-30 60.40 4.17 5.25p 11.8 1.1 11% 2.90p 4.7% And they keep getting revised up slightly as the economy slows. Anybody think the economy is going to boom any time soon?

[runthejoules] 17/1/2019 23:36

ANyone know who's selling? I might have to buy more.

[romi2nikki1] 09/1/2019 10:07

From a broader article in the FT about insolvencies in China " "In the UK, Brexit is forecast to lead to a jump of almost a tenth in insolvencies, even in Euler Hermes’ base-case scenario that an agreement is finally reached. In the event of a disorderly Brexit, corporate failures are expected to rise by 15 per cent or more, depending on the terms on which the UK leaves the trading bloc."

[aleman] 03/1/2019 15:56

I've found what caused the New Year's Eve jump: Https://www.voxmarkets.co.uk/press/telegraph-30-12-18/ Shares to bring you cheer in 2019: the Telegraph’s picks.

[aleman] 20/12/2018 14:19

I see ADVFN's chart has finally caught up.

[edmundshaw] 20/12/2018 13:30

Perhaps worth remembering that BEG was at 140p back in 2009, and that when it was a smaller company. We really have had a run of lean years for insolvencies, with zombie companies on the increase for many years, and many staggering on due to cheap money, with the number sharply turning up (on a narrow definition of zombie) after the crisis of 2009 and the dramatic emergency crash in interest rates from 4.5% to 0.5% in a matter of months. With interest rates on the rise (at least in the US - the UK is not following at the moment for obvious Brexit reasons, but I expect that to be temporary) some of those companies are going to find interest rate burdens no longer sustainable, and many other companies will enter zombie status (defined - loosely - as where where interest payments exceed profits) as interest rates push on upwards.

[aleman] 20/12/2018 12:36

The 2.5p rise since this morning's open (which ADVFN has completely managed to miss) seems to be because Investors Chronicle have updated their coverage with a BUY at 68.4p. ADVFN still show the price at 58.25p when the current spread has risen to 60.4p-61.8p Https://www.investorschronicle.co.uk/tips-ideas/2018/12/20/begbies-traynor-expects-activity-pick-up/

[aleman] 20/12/2018 10:17

The latest in the company formations/dissolutions series. Follow the dissolved trend, which is up to a new high. Quarter Formed Dissolved Net formations Q1/14 147,274 87,223 60,051 Q2/14 148,393 92,515 55,878 Q3/14 141,807 96,561 45,246 Q4/14 136,184 97,138 39,046 Q1/15 159,397 83,312 76,085 Q2/15 153,422 87,047 66,375 Q3/15 147,049 99,219 47,830 Q4/15 138,802 90,437 48,365 Q1/16 172,096 134,157 37,939 (technical spike due to legal change in Q1/16) Q2/16 172,935 111,930 61,005 Q3/16 154,685 102,681 52,004 Q4/16 146,987 111,133 35,854 Q1/17 170,143 108,919 61,224 Q2/17 152,411 114,756 37,655 Q3/17 153,307 129,734 23,573 Q4/17 146,852 117,545 29,307 Q1/18 167,717 129,688 38,029 Q2/18 166,886 126,554 40,332 Q3/18 164,424 131,407 33,017 https://www.gov.uk/government/publications/incorporated-companies-in-the-uk-july-to-september-2018/incorporated-companies-in-the-uk-july-to-september-2018#other-statistics-in-this-release

[aleman] 20/12/2018 10:15

That's a 50% increase in offices handling insolvency from Feb 2017's 44.

[aleman] 20/12/2018 09:52

I'd guess business is picking up and they've started handling insolvency work from some or all of the Springboard, CJM, Pugh and Eddisons offices that were acquired in recent years after taking their time to prepare for it.

[aleman] 20/12/2018 09:38

Something strange just happened. After creeping up 1 by 1 for years, the number of offices quoted on the website just jumped from 55 to 66.

[edmundshaw] 20/12/2018 09:33

All good stuff. Bought back my top slices now, and looking forward to next year with some confidence here! (I had thought over 70p the price was a bit ahead of itself. Maybe, maybe not, anyway I got lucky...)

[aleman] 19/12/2018 18:50

In a nutshell: We remain confident of delivering increased revenue and earnings in line with current market expectations for the full year.

[topvest] 19/12/2018 18:00

A tad disappointing I thought but activity levels are starting to increase so it bodes well for 2019/20. Sounds like the property business will have a quiet H2 though so the core business will need to perform strongly in H2. With all the doom and gloom around, it’s probably well placed.