Building further share in key markets
Building further share in key marketsThe first half result was impressive with 39% revenue growth and a pleasing 16% operating margin (H1 20/21:14.4%), achieved despite important market drivers having been artificially suppressed by government support measures. Growth in revenues and profits reflect successful implementation of earnings enhancing acquisitions, 13 of which have been completed over the last five years.
Business Recovery division reported a 48% increase in first half revenue to £38.7m (H1 20/21: £26.1m), driven principally by first-time contributions from acquisitions (£13.2m). Property and Transaction Services revenues were 19% ahead at £13.6m, with profit at £2.4m, 50% up on a pandemic-affected comparable.
In addition to extended service lines, additional market share and profile, the new group entities have delivered cost savings, cross selling opportunities and other synergies, all of which should underpin future organic growth.
Our forecasts are unchanged and underpinned by an anticipated second half weighting. We also retain a 165p/share fair value estimate, equivalent to a 17.9x FY22e PER and a 1.9% prospective yield (2.9x covered by adjusted earnings).
Begbies Traynor Group is a business recovery, financial advisory and property services consultancy. Co. provides these services through two operating segments: business recovery and financial advisory services, which provides transactional support, valuations and advisory services through its subsidiary, BTG Financial Consulting LLP; and property services, which delivering advisory, such as commercial property valuations, property receiverships, property management and accounting, and as well as transactional services that include property auctioneers, machinery and business asset auctioneers to owners and occupiers of commercial property, investors and financial institution.
Mattioli Woods provides pension consulting and administration, wealth management, asset management and employee benefits consultancy. Co.'s operating segments comprise:Pension consultancy and administration, which include setting up and administering pension schemes, as well as providing consultancy services for one-off activities; Investment and asset management, which manages and placing of investments on behalf of clients; Property management, which manages collective property investment vehicles, facilitates direct commercial property investments on behalf of clients; and Employee benefits, which assists its corporate clients with employee engagement.
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