Multi-disciplined, cashflow-generating growth
Begbies Traynor has concluded FY25 with a very strong performance. 12% revenue growth in FY25, from its multi-disciplined suite of services, has led to 7% growth in Adj. PBT and £19.4m in FCF pre-acquisitions (above expectations). Moreover, the macro-economic environment is supportive, and the pipeline of potential acquisitions is encouraging.FY25 revenue growth of c.12% to £153m was c.1% above consensus expectations. An impressive c.11% organic growth in Business recovery and advisory services to c.£107m sales, reflects Begbies’ ability to advise on larger corporate restructurings as well as recruit senior professionals. Meanwhile Property advisory and transactional services grew revenues 15% (including 7% organically) to c.£46m, also reflecting hires across multiple services.
Despite cost headwinds, Begbies maintained its divisional margins of 26% and 17% in 2H25, leading to Adj EBITDA +10% to £31.3m, Adj PBT +7% to £23.5m and free cashflow of £19.4m pre-acquisitions. This was c. £5m better than expected, in part due to excellent working capital management.
Begbies trades at a c. 35% discount to its long-run average valuation multiples and a discount to peers. With highly profitable organic growth of 5%-6%, and free cashflow to fund both acquisitions and dividends, we see scope for a material rerating from only 8.6x cal 2026 PER.
We raise our PBT estimates and our fair value/share moves up from 145p to 150p.
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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