Q3 trading update underpins forecasts
The group’s Q3 update (to end January 2022) confirmed that underlying trading was broadly in line with the first half. That supports our forecasts, which incorporate relatively conservative market recovery rates.As the current financial year closes on 30 April, higher administrations is more of a story for FY23e. Although the timing is unpredictable, any pick-up in administrations will be more valuable to BEG, as they are typically larger, more complex instructions.
Despite this, the contribution from the Business Recovery arm is still in line with expectations, driven by additional scale and successful integration of acquisitions over the last few years. There is a similar story for Property Advisory & Transactional Services, which has completed two acquisitions this year.
Our unchanged 165p/share fair value estimate equates to 18.8x FY22e PER and 1.9% prospective yield (well covered 2.9x by adjusted earnings). We believe that remains justified based upon the gathering economic headwinds for UK businesses.
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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