REG - Begbies Traynor - Half-year Results
11/12/2023 07:15
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RNS Number : 2549W Begbies Traynor Group PLC 11 December 2023
11 December 2023
Begbies Traynor Group plc
Half year results
for the six months ended 31 October 2023
"Strong first half performance and confidence in full year outlook"
Begbies Traynor Group plc (the 'company' or the 'group'), the professional
services consultancy, today announces its half year results for the six months
ended 31 October 2023.
Financial overview
2023 2022
£m £m
Revenue 65.9 58.5
Adjusted EBITDA(1) 12.8 11.9
Adjusted profit before tax(1,2) 9.9 9.0
Profit before tax 3.0 5.0
Adjusted diluted EPS(1,3) (p) 4.6 4.4
Diluted EPS (p) 0.8 2.3
Interim dividend (p) 1.3 1.2
Net cash (debt) 1.1 (2.4)
Financial highlights - performing well with double digit growth
· Strong first half performance building on consistent track record
of growth in revenue and adjusted earnings
· Growth in revenue of 13% (8% organic, 5% acquired) and adjusted
profit before tax of 10%, having absorbed increased finance costs
· Statutory profit before tax reflecting increased non-cash
acquisition accounting charges
· Increase in interim dividend to 1.3p (2022: 1.2p), which extends
our six consecutive years of dividend growth since 2017
· Strong balance sheet and significant levels of headroom within
committed bank facilities
o Well placed to continue investing in successful organic and acquisitive
growth strategy
o Positive cash position with net cash of £1.1m, after £4.0m of
acquisition-related payments
Divisional highlights - growth across both divisions
· Insolvency and financial advisory performed well
o Increased year on year insolvency activity levels
o Market-leading position maintained (by volume of appointments)
o Added capacity through recruitment for further growth
o Resilient financial advisory performance, with advice provided on
refinancing and restructuring solutions mitigating reduced capital
transactions in the period
· Property advisory and transactional services continue to provide
solid platform for growth
o Organic growth driven by our breadth of expertise and services
o Acquisitions trading well and in line with expectations
Current trading and outlook - in line with expectations
· Confident of delivering full year results in line with current
market expectations(4)
o Extending the group's strong financial track record of growth
o Anticipate continued increase in insolvency activity; financial advisory
anticipated to deliver broadly consistent second half
o Property advisory and transactional services expected to deliver another
year of strong growth
· Q3 trading update will be issued in late February 2024
Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor
Group, said:
"I am pleased to report a strong financial performance in the first six months
of the financial year. We have continued to execute our strategy to grow the
business, reporting double digit revenue and profit growth. The group's
financial performance in the first six months leaves the board confident of
delivering current market expectations(4) for the full year, which will extend
our strong financial track record of growth.
"Our insolvency team has maintained its market-leading position (by volume) in
a growing marketplace nationally, with an increase in insolvency numbers
reflecting the current interest rate and inflation environment; whilst our
advisory and transactional services teams had a successful six months,
reflecting the breadth of advice we provide to our clients, which continue to
provide a solid platform for growth.
"Our broad range of services, diversified client base, organic growth
initiatives and pipeline of acquisition opportunities, combined with
increasing counter-cyclical activity, leaves us confident of continuing to
build upon our strong track record in the current year and beyond."
There will be a webcast and conference call for analysts today at 8:30am.
Please contact Charles Hirst via begbies@mhpgroup.com
(mailto:begbies@mhpgroup.com) or on 020 3128 8100 if you would like to
receive details.
(1. The board uses adjusted performance measures to provide meaningful
information on the performance of the business. The items excluded from
adjusted PBT and EPS are those which arise due to acquisitions in accordance
with IFRS 3 and are not influenced by the day-to-day operations of the group.
Adjusted EBITDA excludes non-cash share-based payment and depreciation charges
from adjusted PBT)
(2. Profit before tax of £3.0m (2022: £5.0m) plus amortisation of
intangible assets arising on acquisitions of £3.0m (2022: £3.2m) plus
transaction costs of £3.9m (2022: £0.8m))
(3. See reconciliation in note 5)
(4. Current range of analyst forecasts for adjusted PBT of
£21.9m-£22.5m (as compiled by the group))
Enquiries please contact:
Begbies Traynor Group plc
0161 837 1700
Ric Traynor - Executive Chairman
Nick Taylor - Group Finance Director
Canaccord Genuity Limited
020 7523 8350
(Nominated Adviser and Joint Broker)
Emma Gabriel / Harry Pardoe
Shore Capital
020 7408 4090
(Joint Broker)
Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas
MHP
020 3128 8100
Reg Hoare / Katie Hunt / Charles Hirst
begbies@mhpgroup.com
Notes to editors
Begbies Traynor Group plc is a leading professional services consultancy,
providing services from a comprehensive network of UK and off-shore locations.
Our professional team include licensed insolvency practitioners,
accountants, chartered surveyors, bankers and lawyers. We provide the
following services to our client base of corporates, financial institutions,
the investment community and the professional community:
· Insolvency
o Corporate and personal insolvency
· Financial advisory
o Business and financial restructuring; debt advisory; forensic accounting
and investigations
· Transactional support
o Corporate finance; business sales agency; property agency; auctions
· Funding
o Commercial finance broking; residential mortgage broking
· Valuations
o Commercial property, business and asset valuations
· Projects and development support
o Building consultancy; transport planning
· Asset management and insurance
o Commercial property management; insurance broking; vacant property risk
management
Further information can be accessed via the group's website at
www.ir.begbies-traynorgroup.com.
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report a strong financial performance in the first six months
of the financial year. We have continued to execute our strategy to grow the
business, reporting double digit revenue and profit growth.
We have a proven growth strategy which, over the five year period between 2019
and 2023, doubled revenue from £60m to £122m and tripled adjusted profit
before tax from £7m to £21m, from a combination of organic growth and
acquisitions. This growth has been delivered across insolvency and our full
range of advisory and transactional services. Our ambition is to maintain this
growth track record with a medium-term revenue target of £200m.
We have continued to grow both divisions in the half year, both organically
and through acquisitions.
Our insolvency teams have had a busy period with an increase in year-on-year
activity levels. We have maintained our market-leading position (by volume) in
a growing marketplace nationally, which is continuing to see an increase in
insolvency numbers reflecting the current interest rate and inflation
environment.
Our financial advisory teams have delivered a resilient performance in the
period, driven by advice provided on refinancing and restructuring solutions,
which has mitigated an anticipated reduction in capital transactions (M&A
and capital investment).
Our property advisory and transactional teams have had a successful six
months, reflecting the breadth of advice we provide to our clients, which
continues to provide a solid platform for growth.
We have continued to invest in the group, having completed three acquisitions
since the beginning of the financial year, as we continue to build our teams.
These earnings accretive acquisitions align well with the group's current
service offerings whilst strengthening our existing regional presence.
Integration is proceeding well with initial trading performance in line with
expectations.
Our strong financial position leaves us well placed to continue to invest in
the business, both organically and through acquisitions, to further build our
scale and range of complementary services.
RESULTS
Group revenue in the half year ended 31 October 2023 increased by 13% to
£65.9m (2022: £58.5m). Adjusted profit before tax(1,2) increased by 10% to
£9.9m (2022: £9.0m), having absorbed increased finance costs. Statutory
profit before tax was £3.0m (2022: £5.0m), reflecting an increase in
acquisition-related transaction costs to £3.9m (2022: £0.8m) and non-cash
amortisation costs of £3.0m (2022: £3.2m).
Adjusted diluted earnings per share(1,3) was 4.6p (2022: 4.4p), reflecting
increased UK corporation tax rates in the period. Diluted earnings per share
was 0.8p (2022: 2.3p).
Net cash as at 31 October 2023 was £1.1m (30 April 2023: net cash of £3.0m,
31 October 2022: net debt of £2.4m), after £4.0m of acquisition related
payments in the period (net of cash acquired).
(1. The board uses adjusted performance measures to provide meaningful
information on the performance of the business. The items excluded from
adjusted PBT and EPS are those which arise due to acquisitions in accordance
with IFRS 3 and are not influenced by the day-to-day operations of the group)
(2. Profit before tax of £3.0m (2022: £5.0m) plus amortisation of
intangible assets arising on acquisitions of £3.0m (2022: £3.2m) plus)
(transaction costs) (of £3.9m (2022: £0.8m))
(3. ) (See reconciliation in note 5)
DIVIDEND
The board is pleased to declare an 8% increase in the interim dividend to 1.3p
(2022: 1.2p), which will extend our six consecutive years of dividend growth
since 2017 and reflects our confidence in sustaining our financial track
record and in the group's financial position and prospects. We remain
committed to a long-term progressive dividend policy, which takes account of
the group's earnings growth, our investment plans and cash requirements,
together with the market outlook.
The interim dividend will be paid on 7 May 2024 to shareholders on the
register on 12 April 2024, with an
ex-dividend date of 11 April 2024.
OUTLOOK
The group's financial performance in the first six months leaves the board
confident of delivering current market expectations(1) for the full year,
which will extend our strong financial track record of growth.
We anticipate that activity levels in our largest service line of insolvency
will continue to increase in tandem with the indicators of corporate financial
stress in the UK, resulting from the current interest rate and inflation
environment. This gives the board confidence that the insolvency team will
continue to deliver growth through the second half of the current year and
thereafter.
We expect our financial advisory services to deliver a broadly consistent
performance in the second half.
We anticipate our property advisory and transactional services division will
report another year of strong growth, benefitting from the organic growth seen
in the first half and the contribution from current year acquisitions.
Our broad range of services, diversified client base, organic growth
initiatives and pipeline of acquisition opportunities, combined with
increasing counter-cyclical activity, leaves us confident of continuing to
build upon our strong track record in the current year and beyond.
We will provide an update on third quarter trading in late February 2024.
(1. )(C)(urrent range of analyst forecasts for adjusted PBT of
£21.9m-£22.5m (as compiled by the group))
Ric Traynor
Executive Chairman
11 December 2023
BUSINESS REVIEW
OPERATING REVIEW
Insolvency and advisory
Financial summary
Revenue in the period increased by 11% (9% organic) to £47.0m (2022:
£42.4m), reflecting increased insolvency activity levels partially offset by
a quieter market for our advisory teams. Revenue from formal insolvency
appointments increased by 17% to £38.8m (2022: £33.3m). Advisory services
revenue reduced to £8.2m (2022: £9.1m), reflecting a strong comparative
period (which benefitted from a number of contingent fees) and an anticipated
reduction in corporate transactions (M&A and other capital investment).
Segmental profits for the period increased by 7% to £11.4m (2022: £10.7m).
Divisional operating margins reduced slightly overall to 24.2% (2022: 25.2%),
with improved insolvency margins offset by lower margins from financial
advisory (compared to the strong comparative noted above and due to a quieter
market).
Insolvency market
The number of corporate insolvencies in the 12 months ended 30 September
2023(1) increased to 24,326 (2022: 20,742). This increase in volume has
largely been from increased liquidations, both voluntary and compulsory, which
typically represent insolvencies of smaller companies. Administration volumes
(which typically involve larger and more complex instructions) have also
increased over the last year and are approaching pre-pandemic levels.
(1. ) (Source: The Insolvency Service quarterly statistics on the number of
corporate insolvencies in England and Wales on a seasonally adjusted basis for
the 12 months ended 30 September)
Operating review
Our insolvency teams have experienced increased demand in the period,
reflecting activity levels across the market as corporate distress levels
continue to increase. We have maintained our market leading position (by
volume) as we continue to see the benefits of our national office network. The
increased activity has resulted in revenue growth of 17% in the period and our
order book now stands at £35.0m (October 2022: £33.9m, April 2023: £35.2m).
As a result of the continuing increase in demand we have continued to invest
in growing our team, which has increased FTE numbers by 12% over the last 12
months (6% since the start of the financial year), ensuring we retain the
headroom to handle a further increase in activity levels.
In addition in September 2023, we acquired the Cardiff-based insolvency team
from Jones Giles & Clay, who have joined our existing Cardiff insolvency
team.
Across our mix of financial advisory services we continue to deliver a
resilient performance with advice provided on refinancing and restructuring
solutions mitigating the anticipated reduction in capital transactions
(M&A and other capital investment).
Property advisory and transactional services
Financial summary
Revenue in the period increased by 17% (4% organic) to £18.9m (2022:
£16.1m), reflecting the resilient range of services and expertise which
continues to provide a solid platform for growth.
Segmental profits for the period increased by 32% to £3.7m (2022: £2.8m),
with operating margins improved to 19.6% (2022: 17.4%).
Operating review
Financial performance in the period reflects our breadth of expertise and
services, which has enabled the business to grow regardless of the headwinds
in the broader UK commercial real estate sector.
The valuations team, who predominantly provide services to lenders, benefitted
from the depth of their expertise and reputation. Instruction levels in the
period have been driven by revaluations and loan security reviews which have
offset reduced instructions for new loan valuations. We have continued to
invest in the team through the acquisition of Andrew Forbes in November 2023
(following the period end). This has extended our regional presence across the
South West and increased the size of our national valuations team to over 100
colleagues.
The auctions team had a successful six months with increased volumes from the
sale of property, plant and machinery. The increase in auction sales has
partially mitigated weaker transactional markets in both commercial property
and business sales agency.
Our building consultancy team, delivering projects and development activity,
continued to expand in the period, with increased activity levels across a
broad client base. Our asset management and insurance teams had a robust six
months.
At the start of the new financial year we acquired Banks Long & Co, a
multi-disciplinary chartered surveyors practice. The team provides commercial
property agency, property management, building consultancy and valuation
services and the acquisition has developed our regional offering across
Lincolnshire and Humberside. Integration is proceeding well with trading
performance in line with expectations.
FINANCE REVIEW
Financial summary
6 months to 31 Oct 2023 6 months to 31 Oct 2022 12 months to 30 Apr 2023
£m £m £m
Revenue 65.9 58.5 121.8
Adjusted EBITDA 12.8 11.9 26.6
Share-based payments (0.2) (0.7) (1.3)
Depreciation (1.9) (1.7) (3.5)
Operating profit (before transaction costs and amortisation) 10.7 9.5 21.8
Finance costs (0.8) (0.5) (1.1)
Adjusted profit before tax 9.9 9.0 20.7
Transaction costs (3.9) (0.8) (8.4)
Amortisation of intangible assets arising on acquisitions (3.0) (3.2) (6.3)
Profit before tax 3.0 5.0 6.0
Tax on profits on ordinary activities (1.8) (1.3) (3.1)
Profit for the period 1.2 3.7 2.9
Operating result (before transaction costs and amortisation)
Revenue in the period increased by £7.4m to £65.9m (2022: £58.5m), an
overall increase of 13% (8% organic, 5% acquired).
Adjusted EBITDA increased to £12.8m (2022: £11.9m) with non-cash costs
(share-based payments and depreciation) decreasing to £2.1m (2022: £2.4m),
due to lower share-based payment charges.
Operating performance by segment is detailed below:
Revenue (£m) Operating profit (£m)
2023 2022 growth 2023 2022 growth
Business recovery and financial advisory 47.0 42.4 11% 11.4 10.7 7%
Property advisory and transactional services 18.9 16.1 17% 3.7 2.8 32%
Shared and central costs - - - (4.4) (4.0) 10%
Total 65.9 58.5 13% 10.7 9.5 13%
Shared and central costs increased to £4.4m principally due to investment in
the group's IT and HR capability but remained broadly unchanged as a
percentage of revenue at 6.7% (2022: 6.8%).
Operating margins were unchanged at 16.2% (2022: 16.2%).
Finance costs increased to £0.8m (2022: £0.5m) resulting from higher IFRS 16
interest costs (due to new property leases commencing in the period) and the
increased cost of the group's borrowing facilities due to higher interest
rates.
Adjusted profit before tax increased by 10% to £9.9m (2022: £9.0m).
Transaction costs
Transaction costs arise due to acquisitions in accordance with IFRS 3 and
include the following:
· Acquisition consideration where the vendors have obligations in the
sale and purchase agreement to provide post-acquisition services for a fixed
period (deemed remuneration in accordance with IFRS 3). This consideration is
charged to profit over the period of service;
· Gains on acquisitions, where the fair value of assets acquired
exceeds the consideration under IFRS 3; and
· Legal and professional fees incurred on acquisitions.
These costs (detailed in note 3) increased to £3.9m (2022: £0.8m),
reflecting acquisition consideration from both current and prior year
acquisitions of £4.5m (2022: £5.4m), acquisition costs of £0.1m (2022:
£0.3m), partially offset by a gain on acquisition of £0.7m (2022: £4.9m).
Tax
The overall tax charge for the period was £1.8m (2022: £1.3m) as detailed
below:
2023 2022
Profit before tax Tax Profit after tax Effective rate Profit before tax Tax Profit after tax Effective rate
£m £m £m £m £m £m
Adjusted 9.9 (2.6) 7.3 26% 9.0 (1.9) 7.1 21%
Transaction costs (3.9) - (3.9) - (0.8) - (0.8) -
Amortisation (3.0) 0.8 (2.2) 25% (3.2) 0.6 (2.6) 19%
Tax on ordinary activities 3.0 (1.8) 1.2 60% 5.0 (1.3) 3.7 26%
The adjusted tax rate of 26% is based on the expected rate for the full year,
with the increase from the comparative period due to the increased UK headline
rate.
Earnings per share
Adjusted diluted earnings per share(1) was 4.6p (2022: 4.4p), reflecting
increased UK corporation tax rates in the period. Diluted earnings per share
was 0.8p (2022: 2.3p).
(1. See reconciliation in note 5)
Partners and employees
The average number of full-time equivalent (FTE) partners and employees
working in the group over the period increased due to both acquisitions and
organic investment.
2023 2022
Insolvency and advisory services Property advisory and transactional services Shared and support teams Total Insolvency and advisory services Property advisory and transactional services Shared and support teams Total
Fee earners 566 320 - 886 506 289 - 795
Support teams 54 11 100 165 64 7 92 163
Total 620 331 100 1,051 570 296 92 958
The ratio of our support teams to fee earning partners and employees is 5.4
(Apr 2023: 5.4, October 2022: 4.9).
Financing
The group has maintained a robust financial position with net cash of £1.1m
as at 31 October 2023 (30 April 2023: net cash £3.0m, 31 October 2022: net
debt £2.4m), having made £4.0m of acquisition and deferred consideration
payments in the period (net of cash acquired).
We have significant levels of headroom within our bank facilities which are
committed until August 2025 and comprise a £25m unsecured, committed
revolving credit facility and a £5m uncommitted acquisition facility. During
the period, all bank covenants were comfortably met.
Cash flow in the period is summarised as follows:
6 months to 6 months to 12 months to 30 Apr 2023
£m 31 Oct 2023 31 Oct 2022
Adjusted EBITDA 12.8 11.9 26.6
Working capital (4.6) (4.8) (2.8)
Cash from operating activities (before acquisition consideration payments(1)) 8.2 7.1 23.8
Tax (1.8) (3.2) (5.3)
Interest (0.9) (0.4) (1.1)
Capital expenditure (0.8) (0.3) (1.0)
Capital element of lease payments (0.7) (1.4) (2.3)
Free cash flow 4.0 1.8 14.1
Acquisition payments (net of cash acquired)(2) (4.0) (7.4) (10.6)
Net proceeds from share issues - 0.2 0.2
Dividends (1.9) (1.7) (5.4)
Net cash outflow (1.9) (7.1) (1.7)
(1. Acquisition consideration payments accounted for as deemed
remuneration in accordance with IFRS3)
(2. Acquisition consideration payments (defined above), acquisition costs
and contingent consideration payments net of cash acquired)
Cash from operating activities (before acquisition consideration payments) was
£8.2m (2022: £7.1m) due to increased EBITDA of £0.9m. Working capital
absorption was broadly in line with the comparative period. Tax payments were
£1.8m (2022: £3.2m, including £1.0m of accelerated payments).
Free cash flow in the period was £4.0m (2022: £1.8m).
Acquisition payments (net of cash acquired) in the period were £4.0m (2022:
£7.4m) comprising: the acquisition of Banks Long £0.8m (2022: Mantra Capital
(£4.7m) and Budworth Hardcastle (£0.5m)), contingent payments in respect of
prior year acquisitions of £3.1m (2022: £1.9m) and acquisition costs £0.1m
(2022: £0.1m).
Net assets
Net assets as at 31 October 2023 were £80.2m, compared to £84.3m as at 30
April 2023. The movement represents an increase of £7.3m from post-tax
adjusted earnings and £0.6m from the issue of new shares; offset by dividends
of £5.9m and the post-tax impact of acquisition-related transaction and
amortisation costs of £6.1m.
Ric Traynor
Nick Taylor
Executive chairman
Group finance director
11 December 2023
11 December 2023
Consolidated statement of comprehensive income
Six months ended Six months ended Year
ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Revenue 2 65,859 58,457 121,825
Direct costs (38,096) (32,743) (67,700)
Gross profit 27,763 25,714 54,125
Other operating income 385 142 208
Administrative expenses (24,262) (20,363) (47,178)
Operating profit before amortisation and transaction costs 2 10,699 9,473 21,821
Transaction costs 3 (3,830) (828) (8,440)
Amortisation of intangible assets arising on acquisitions (2,983) (3,152) (6,226)
Operating profit 3,886 5,493 7,155
Finance costs 4 (845) (503) (1,170)
Profit before tax 3,041 4,990 5,985
Tax on profits on ordinary activities (1,822) (1,269) (3,074)
Profit and total comprehensive income for the period 1,219 3,721 2,911
Earnings per share
Basic 5 0.8p 2.4p 1.9p
Diluted 5 0.8p 2.3p 1.8p
All of the profit and comprehensive income for the period is attributable to
equity holders of the parent.
Consolidated statement of changes in equity
For the six months ended 31 October 2023 (unaudited) Share capital Share premium Merger reserve Capital redemption reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 May 2023 7,727 29,973 27,944 304 18,392 84,340
Total comprehensive income for the period - - - - 1,219 1,219
Dividends - - - - (5,944) (5,944)
Shares issued as consideration for acquisitions 14 - 361 - - 375
Credit to equity for equity-settled share-based payments - - - - 7 7
Other share options 135 46 - - - 181
At 31 October 2023 7,876 30,019 28,305 304 13,674 80,178
For the six months ended 31 October 2022 (unaudited) Share capital Share premium Merger reserve Capital redemption reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 May 2022 7,671 29,787 27,172 304 19,591 84,525
Total comprehensive income for the period - - - - 3,721 3,721
Dividends - - - - (5,387) (5,387)
Shares issued as consideration for acquisitions 28 - 772 - - 800
Credit to equity for equity-settled share-based payments - - - - 744 744
Other share options 14 156 - - - 170
At 31 October 2022 7,713 29,943 27,944 304 18,669 84,573
For the year ended 30 April 2023 (audited) Share capital Share premium Merger reserve Capital redemption reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 May 2022 7,671 29,787 27,172 304 19,591 84,525
Total comprehensive income for the period - - - - 2,911 2,911
Dividends - - - - (5,387) (5,387)
Credit to equity for equity-settled share-based payments - - - - 1,277 1,277
Shares issued as consideration for acquisitions 28 - 772 - - 800
Other share options 28 186 - - - 214
At 30 April 2023 7,727 29,973 27,944 304 18,392 84,340
Consolidated balance sheet
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Non-current assets
Intangible assets 71,000 76,273 73,386
Property, plant and equipment 2,164 1,980 1,993
Right of use assets 9,664 5,400 7,751
Trade and other receivables 7 4,763 7,439 5,200
87,591 91,092 88,330
Current assets
Trade and other receivables 7 60,237 54,976 55,550
Cash and cash equivalents 8,061 7,551 8,001
68,298 62,527 63,551
Total assets 155,889 153,619 151,881
Current liabilities
Trade and other payables 8 (46,131) (40,402) (42,644)
Current tax liabilities (1,970) (707) (1,110)
Lease liabilities (2,181) (1,009) (1,554)
Provisions (1,091) (1,249) (1,006)
(51,373) (43,367) (46,314)
Net current assets 16,925 19,160 17,237
Non-current liabilities
Borrowings (7,000) (10,000) (5,000)
Lease liabilities (8,244) (4,960) (6,658)
Provisions (2,265) (2,292) (2,139)
Deferred tax (6,829) (8,427) (7,430)
(24,338) (25,679) (21,227)
Total liabilities (75,711) (69,046) (67,541)
Net assets 80,178 84,573 84,340
Equity
Share capital 7,876 7,713 7,727
Share premium 30,019 29,943 29,973
Merger reserve 28,305 27,944 27,944
Capital redemption reserve 304 304 304
Retained earnings 13,674 18,669 18,392
Equity attributable to owners of the company 80,178 84,573 84,340
Consolidated cash flow statement
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated by operations 9 3,855 (970) 13,218
Income taxes paid (1,924) (3,216) (5,328)
Interest paid on borrowings (512) (274) (668)
Interest paid on lease liabilities (347) (199) (408)
Net cash from operating activities (before acquisition consideration payments)
5,338 3,464 17,413
Acquisition consideration payments which are deemed remuneration under IFRS 3 (4,266) (8,123) (10,599)
Net cash from operating activities 1,072 (4,659) 6,814
Investing activities
Purchase of intangible fixed assets - (18) (56)
Purchase of property, plant and equipment (756) (309) (931)
Proceeds on disposal of property, plant and equipment - - 20
Acquisition of businesses (305) (327) (809)
Deferred consideration payments - - (325)
Net cash acquired in acquisition of businesses 575 1,055 1,158
Net cash from investing activities (486) 401 (943)
Financing activities
Dividends paid (1,854) (1,687) (5,387)
Net proceeds on issue of shares 31 170 213
Repayment of obligations under leases (703) (1,359) (2,381)
Drawdown of loans 2,000 5,000 -
Net cash from financing activities (526) 2,124 (7,555)
Net increase (decrease) in cash and cash equivalents 60 (2,134) (1,684)
Cash and cash equivalents at beginning of period 8,001 9,685 9,685
Cash and cash equivalents at end of period 8,061 7,551 8,001
1. Basis of preparation and accounting policies
(a) Basis of preparation
The half year condensed consolidated financial statements do not include all
of the information and disclosures required for full annual financial
statements and should be read in conjunction with the group's annual financial
statements as at 30 April 2023, which have been prepared in accordance with
IFRSs as adopted by the European Union.
This condensed consolidated half year financial information does not comprise
statutory accounts within the meaning of Section 435 of the Companies Act
2006. Statutory accounts for the year ended 30 April 2023 were approved by the
board of directors on
10 July 2023 and delivered to the Registrar of Companies. The report of the
auditor on those accounts was unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying their report and did not contain statements under section 498 (2)
or (3) of the Companies Act 2006.
The directors have reviewed the financial resources available to the group and
have concluded that the group is a going concern. This conclusion is based
upon, amongst other matters, a review of the group's financial projections for
a period of twelve months following the date of this announcement, together
with a review of the cash and committed borrowing facilities available to the
group. Accordingly, the going concern basis has been used in preparing these
half year condensed consolidated financial statements.
The condensed consolidated financial statements for the six months ended 31
October 2023 have not been audited nor subject to an interim review by the
auditors. IAS 34 'Interim financial reporting' is not applicable to these
half year condensed consolidated financial statements and has therefore not
been applied.
(b) Significant accounting policies
The accounting policies adopted in preparation of the half year condensed
consolidated financial statements are consistent with those followed in the
preparation of the group's annual financial statements for the year ended 30
April 2023.
2. Segmental analysis by class of business
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue
Business recovery and financial advisory 46,993 42,350 89,696
Property advisory and transactional services 18,866 16,107 32,129
65,859 58,457 121,825
Operating profit before amortisation and transaction costs
Business recovery and financial advisory 11,391 10,652 23,999
Property advisory and transactional services 3,681 2,829 5,692
Shared and central costs (4,373) (4,008) (7,870)
10,699 9,473 21,821
3. Transaction costs
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Acquisition consideration (deemed remuneration in accordance with IFRS 3) 4,514 5,425 12,304
Acquisition costs 61 327 434
Gain on acquisition (745) (4,924) (4,298)
3,830 828 8,440
4. Finance costs
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Interest on bank loans 498 303 762
Finance charge on lease liabilities 317 161 343
Finance charge on dilapidations provisions 30 39 65
845 503 1,170
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings
Profit for the period attributable to equity holders 1,219 3,721 2,911
31 October 2023 (unaudited) 31 October 2022 30 April 2023 (audited)
(unaudited)
number number number
'000 '000 '000
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 158,076 155,962 155,634
per share
Effect of dilutive potential ordinary shares:
Share options 1,611 6,054 6,423
Contingent shares - - 233
Weighted average number of ordinary shares for the purposes of diluted 159,687 162,016 162,290
earnings per share
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
pence pence pence
Basic earnings per share 0.8 2.4 1.9
Diluted earnings per share 0.8 2.3 1.8
The following additional earnings per share figures are presented as the
directors believe they provide a better understanding of the trading position
of the group, as they exclude the accounting charges which arise due to
acquisitions in accordance with IFRS 3 and are not influenced by the
day-to-day operations of the group.
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings
Profit for the period attributable to equity holders 1,219 3,721 2,911
Amortisation of intangible assets arising on acquisitions 2,983 3,152 6,226
Transaction costs 3,830 828 8,440
Tax effect of above items (746) (615) (1,236)
Adjusted earnings 7,286 7,086 16,341
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
(unaudited) (unaudited) (audited)
pence pence pence
Adjusted basic earnings per share 4.6 4.5 10.5
Adjusted diluted earnings per share 4.6 4.4 10.1
6. Dividends
The interim dividend of 1.3p (2022: 1.2p) per share (not recognised as a
liability at 31 October 2023) will be payable on 7 May 2024 to ordinary
shareholders on the register at 12 April 2024. The final dividend of 2.6p per
share as proposed in the 30 April 2023 financial statements and approved at
the group's AGM was paid on 3 November 2023 and was recognised as a liability
at 31 October 2023.
7. Trade and other receivables
31 October 2023 (unaudited) 31 October 2022 30 April 2023 (audited)
(unaudited)
£'000 £'000 £'000
Non current
Deemed remuneration 4,763 7,439 5,200
Current
Trade receivables 11,448 11,847 11,652
Unbilled income 41,552 35,735 37,489
Other debtors and prepayments 3,970 4,019 2,987
Deemed remuneration 3,267 3,375 3,422
60,237 54,976 55,550
8. Trade and other payables
31 October 2023 (unaudited) 31 October 2022 30 April 2023 (audited)
(unaudited)
£'000 £'000 £'000
Current
Trade payables 2,672 1,450 2,055
Accruals 9,761 8,698 10,454
Final dividend 4,090 3,700 -
Other taxes and social security 5,197 4,406 5,209
Deferred income 6,998 5,799 6,503
Other creditors 14,059 14,161 14,350
Deferred consideration 13 246 13
Deemed remuneration liabilities 3,341 1,942 4,060
46,131 40,402 42,644
9. Reconciliation to the cash flow statement
31 October 2023 (unaudited) 31 October 2022 30 April 2023 (audited)
(unaudited)
£'000 £'000 £'000
Profit for the period 1,219 3,721 2,911
Adjustments for:
Tax 1,822 1,269 3,074
Finance costs 845 503 1,170
Amortisation of intangible assets 3,071 3,243 6,410
Depreciation of property, plant and equipment 596 536 1,114
Depreciation of right of use assets 1,246 1,096 2,136
Gain on acquisition (744) (4,924) (4,298)
Acquisition costs 61 327 434
Profit on disposal of property, plant and equipment - - (13)
Loss on disposal of right of use asset - - 42
Share-based payment expense 157 745 1,277
Deemed remuneration obligations settled through equity 375 800 800
Decrease (increase) in deemed remuneration receivable 592 (3,962) (1,769)
(Decrease) increase in deemed remuneration liabilities (719) 464 2,675
Operating cash flows before movements in working capital 8,521 3,818 15,963
Increase in receivables (4,364) (3,428) (4,656)
(Decrease) increase in payables (199) (1,337) 2,480
Increase (decrease) in provisions (103) (23) (569)
Cash generated by operations 3,855 (970) 13,218
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