- Shares gain 3% in morning trading
- New debt facility of £25 million replaces previous with HSBC
- On track to meet full year 2024 expectations
Shares in Begbies Traynor (BEG:AIM) gained over 3% to 113p as the insolvency specialist said trading for the third quarter ending 31 January 2024 was ‘in line’ with the outlook stated at the time of their half year results in December 2023.
The current range of analyst forecasts for revenue is £131.1 million to £135.2 million and adjusted pre-tax profits of £21.9 million to £22.5 million (as compiled by the group).
The firm also announced a new £25 million debt facility which replaces an existing facility with HSBC (HSBA), which was due to mature in August 2025, and is for an initial three-year term until February 2027 giving a potential maturity date of February 2029.
Begbies' shares have fallen 18% over the past year which analysts at Shore Capital believe is due to ‘fewer voluntary liquidations occurring.’
Both the company’s divisions are trading well with the company benefitting from tough economic environment in the UK.
Ric Traynor, executive chairman of Begbies Traynor said: ‘We have continued to perform well across the group and our outlook for the full year remains unchanged, which will extend our strong financial track record of growth.
‘We are pleased to have agreed a new debt facility with HSBC which, alongside the group's cash generation, provides us with the flexibility to complement our organic growth with selective acquisitions. This will enable us to both build on our decade long history of growth and execute our strategy to extend our scale and range of services.’
EXPERT VIEW
Analysts at Shore Capital said in a research note: ‘As UK corporate distress levels rise, the outlook for Begbies is positive given its earnings bias (circa 70% income) towards countercyclical and defensive activities.
‘Both divisions are trading in line with expectations. For full year 2024, we forecast the business recovery and financial advisory division to generate revenue of £97.9 million and the property advisory and transactional services division to generate revenue of £36.1 million.’
