Good morning!

Today is Fed decision day. President Trump has been tweeting unhappily about it, but it looks like US interest rates will increase toward 2.5%.

Away from macro, I have noticed the following RNS announcements:

  • Begbies Traynor (LON:BEG) - half year report
  • 888 (LON:888) - pre close trading update
  • Cambridge Cognition Holdings (LON:COG) - trading update
  • Yu (LON:YU.) - notice of appointment of FCA investigators
  • Manolete Partners (LON:MANO) - maiden interim results are in line with expectations. What a relief - it has been listed since Friday!

Begbies Traynor (LON:BEG)

  • Share price: 68.8p (pre-open)
  • No. of shares: 110.5 million
  • Market cap: £76 million

Half-year report

Begbies Traynor Group plc (the 'company' or the 'group'), the business recovery, financial advisory and property services consultancy, today announces its half year results for the six months ended 31 October 2018.

This company is useful as a barometer of financial distress in the economy.

The numbers show some modest progress against last year. There have been some acquisitions:

  • revenue +£2 million to £28 million
  • adjusted PBT +10% to £3.2 million
  • after amortisation of acquired intangibles and transaction costs, actual PBT reduces from £1 million to £0.6 million (see the debate on my previous commentary)
  • net down down, dividend up


Careful wording: the company is "well placed to deliver up current market expectations for the full year". There is a second half weighting, relying on contingent fees and higher activity levels.

Insolvency Market

Corporate insolvencies are up 6% on a trailing 12-month basis, to September 2018.

After a couple of very lean years, this means that business looks to be getting back to normal for insolvency practitioners.

Begbies has been involved with the administrations of a music festival, an estate agency and a menswear retailer, and has advised House of Fraser landlords on the CVA process.

These individual cases give us a sense for how a full-blown consumer recession would (counter-cyclically) produce a boom in the demand for Begbies' services.

My view

For reasons previously discussed, this share doesn't interest me as a potential investment - I don't invest in professional services businesses. 

Its announcements are useful, however, as confirmation…

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