- Double-digit growth in 1H revenues and profit
- Company confident of meeting annual guidance
- Profit-taking leaves shares down 4%
Business recovery and financial advisory specialist Begbies Traynor (BEG:AIM) said it expected to meet full year expectations after delivering 12% growth in revenues and 13% growth in pre-tax profit for the half year to 30 October.
With the shares up 13% over the last two months, and consensus estimates sitting at the top end of company guidance, it appears investors were happy to take profit sending the shares 4% lower to 141p.
That leaves the shares up around 5% for the year compared with a gain of 2.6% for the FTSE All-Share.
Executive chairman Ric Traynor commented: ‘We expect continued growth from business recovery and financial advisory, given its increased order book, higher level of enquiries and increasing economic headwinds.
‘We are also confident in the prospects for property advisory and transactional services, reflecting its resilient income streams, continuing flow of new instructions and potential to continue developing its mix of services.
POSITIVELY POSITIONED
Shore Capital analyst Vivek Raja left his forecasts unchanged but noted ‘a pick-up in mid-market administrations could drive acceleration in revenue growth and operating margin progression, implying earnings-per-share upside’.
Analysts at Canaccord Genuity also maintained their estimates but left open the possibility of future upgrades from corporate activity.
‘Given the company's strong track record of accretive M&A, (mergers and acquisitions) we would not be surprised to see further EPS enhancing deals over our forecast horizon.’
GOOD NEWS IS BAD NEWS
Investment director at AJ Bell Russ Mould commented: ‘Good news for insolvency practitioner Begbies Traynor tends to be bad news for almost everyone else.
‘The company is seeing momentum build across its business - most notably in the insolvency part as UK businesses struggle with weak consumer sentiment, surging costs and rising interest rates.
‘Soberingly, Begbies expects to continue to do well moving forward which suggests it can see that there are a large number of firms which are close to the brink.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor of the article (Ian Conway) own shares in AJ Bell.
