Delivering sustainable, quality growth
Begbies Traynor’s track record demonstrates its ability to generate consistent growth in increasingly sustainable revenues across the economic cycle. This stems from a strategy driven by value-accretive acquisitions over the past six years, designed to build both upon existing and develop new, complementary disciplines.The results are clearly visible in 16% CAGR in EPS from FY16-FY20, consistently positive cash generation and 8% pa dividend growth since 2017. Earnings growth is significantly ahead of the UK insolvency market (4% CAGR FY16-FY20), reflecting improved market shares from an increasingly diversified business, divisional cross sales / referrals, and the benefit of the acquisition strategy.
The current portfolio combines corporate and personal insolvency, corporate finance, financial advisory and a broad range of property consultancy and transactional services. That is an increasingly well-balanced revenue base, including counter-cyclical and more stable, contracted, cyclical income. We expect more of the same strategically, as management intends to secure further earnings accretive acquisitions from a pipeline of potential additions.
An excellent growth record and strong prospects (+50% EPS growth forecast in next 2 years) are not adequately reflected in a 12.4x FY22e PER and 3% yield.
At our 140p fair value / share the FY22e PER is 16.3x and yield 2.3%, ratings that we regard as more suited to Begbies’ track record and outlook.
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.
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