TIDMBEG
RNS Number : 5083V
Begbies Traynor Group PLC
14 December 2021
14 December 2021
Begbies Traynor Group plc
Half year results
for the six months ended 31 October 2021
"Strong first half performance and confidence in full year
outlook"
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 2021.
Financial overview
2021 2020
GBPm GBPm
----------------------------- ------ ------
Revenue 52.3 37.5
Adjusted profit before tax*
** 8.0 5.0
Profit before tax 2.7 0.5
----------------------------- ------ ------
Adjusted basic EPS* ***
(p) 4.1 3.1
Basic EPS (p) (0.2) (0.3)
Interim dividend (p) 1.1 1.0
----------------------------- ------ ------
Net cash 1.2 0.7
----------------------------- ------ ------
Highlights
-- Strong financial performance, reflects benefit and integration of recent acquisitions
o Maintains track record of growth in revenue and adjusted
earnings
-- Revenue growth of 39% with increased operating margins to 16.0% (2020: 14.4%)
-- Strong adjusted profit before tax growth of 60%; statutory
profit before tax reflects increased non-cash amortisation costs,
and transaction costs, from recent acquisitions
-- Significant growth in segmental revenue and profits
o Business recovery and financial advisory reported material
growth: recent acquisitions in line with expectations; organic
activity reflected suppressed market, as expected; advisory and
transactional teams performed well
o Property advisory and transactional services: performance
improved from lockdown impacted prior period
-- Continued to expand the scale and capabilities of the group
o Acquired MAF Finance Group (finance brokerage) in May 2021,
which complements existing advisory and transactional services
o Acquired the team from Fernie Greaves Chartered Surveyors in
October 2021, who joined our existing Eddisons Sheffield office
-- 10% increase in the interim dividend, building on the increases of the previous four years
-- Strong balance sheet and significant levels of headroom
within our committed bank facilities enable continued investment in
organic and acquisition opportunities
Current trading and outlook
-- Results for the full year expected to be in line with current
market expectations****, which will represent a year of significant
growth
o As previously guided, we expect a second half weighting as a
result of an anticipated increase in market insolvency levels over
the remainder of the financial year
-- Q3 trading update will be issued in early March 2022
Commenting on the results, Ric Traynor, Executive Chairman of
Begbies Traynor Group, said:
"I am pleased to report a strong financial performance in the
period, which is testament to the benefit and integration of our
recent acquisitions and maintains our track record of growth in
revenue and adjusted earnings. This strong performance, and an
anticipated increase in national insolvency numbers following the
removal of the Government's pandemic support measures, leaves us
confident of delivering market expectations**** for the full
year.
"We have a strong platform for growth, and we continue to
progress a pipeline of acquisition opportunities, which together
with organic growth initiatives across the group, will enable us to
build upon our track record and we remain confident in our outlook
for the current year and beyond."
* The board uses adjusted performance measures to provide
meaningful information on the performance of the business. The
items excluded from our adjusted results are those which arise due
to acquisitions in accordance with IFRS 3. They are not influenced
by the day-to-day operations of the group.
** Profit before tax of GBP2.7m (2020: GBP0.5m) plus
amortisation of intangible assets arising on acquisitions of
GBP2.6m (2020: GBP1.5m) plus transaction costs of GBP2.7m (2020:
GBP3.1m).
*** See reconciliation in note 5.
**** Current range of analyst forecasts for adjusted PBT of
GBP17.0m-GBP18.5m (as compiled by the group)
There will be a webcast and conference call for analysts today
at 9:00am. Please contact Florence Mayo via begbies@mhpc.com or on
020 3128 8572 if you would like to receive details.
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)
Adam James / Patrick Dolaghan
Shore Capital 020 7408 4090
(Joint Broker)
Malachy McEntyre / Mark Percy / Anita Ghanekar / James
Thomas
MHP Communications 020 3128 8572
Reg Hoare / Katie Hunt / Florence Mayo begbies@mhpc.com
Notes to editors
Begbies Traynor Group plc is a leading business recovery,
financial advisory and property services consultancy, providing
services nationally from a comprehensive network of UK locations.
The group has 990 staff and partners and the professional staff
include licensed insolvency practitioners, accountants, chartered
surveyors and lawyers.
The group's services include:
-- Corporate and personal insolvency - we handle the largest
number of corporate insolvency appointments in the UK, principally
serving the mid-market and smaller companies.
-- Financial advisory - Debt advisory, due diligence and
transactional support, accelerated corporate finance, pensions
advisory, business and financial restructuring, forensic accounting
and investigations, finance broking.
-- Corporate finance - buy and sell side support on corporate transactions.
-- Valuations - valuation of property, businesses, machinery and business assets.
-- Property consultancy, planning and management - building
consultancy, commercial property management, specialist insurance
and vacant property risk management, transport planning and
design.
-- Transactional services - sale of property, machinery and
other business assets through physical and online auctions;
business sales agency; commercial property agency.
Further information can be accessed via the group's website at
www.begbies-traynorgroup.com/investor-relations.
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report a strong financial performance in the
first six months of our financial year, which is testament to the
benefit and integration of our recent acquisitions and maintains
our track record of growth in revenue and adjusted earnings.
The Government's financial support measures, which have been in
place since the start of the pandemic, have progressively been
withdrawn over the period, with the final measures scheduled to end
in March 2022. As a result, insolvency numbers have increased over
the last six months and have now returned to pre-pandemic levels*.
The increases to date have principally been from increased
liquidations (which are typically insolvencies of smaller
companies). Although administrations (which are typically larger
and more complex instructions) have increased in recent months from
the record low levels, they remain much lower than pre-pandemic
levels.
Both of our operating divisions have delivered a strong
performance in the six months, with significant growth in segmental
revenue and profits.
The business recovery and financial advisory division has
reported material growth in the period. The prior year acquisitions
have performed in line with expectations and have been integrated
as planned. Organic activity levels have reflected the suppressed
market dynamics in the six months as expected. Our corporate
finance team had a successful six months of deal completions and
has a strong pipeline of transactions for the second half of our
financial year. The MAF Finance Group acquisition (completed in May
2021) has delivered results in line with expectations, with synergy
and cross selling opportunities being identified as the business
has been integrated into the group.
The property advisory and transactional services division
performed well and achieved year on year growth in revenue and
profit (inclusive of acquisitions) from an improved trading
performance compared to the lockdown impacted comparative
period.
We have a strong balance sheet and significant levels of
headroom within our committed bank facilities, which ensures we are
well placed to continue to invest in our successful growth
strategy.
* Insolvency Service - monthly insolvency statistics October
2021 published 16 November 2021
RESULTS
Group revenue in the half year ended 31 October 2021 increased
by 39% to GBP52.3m (2020: GBP37.5m). Operating margins increased in
the period to 16.0% (2020: 14.4%), resulting in a 60% increase in
adjusted* profit before tax** to GBP8.0m (2020: GBP5.0m). Statutory
profit before tax was GBP2.7m (2020: GBP0.5m), reflecting an
increase in non-cash amortisation costs from recent acquisitions to
GBP2.6m (2020: GBP1.5m) and transaction costs of GBP2.7m (2020:
GBP3.1m).
Adjusted* basic earnings per share*** increased by 32% to 4.1p
(2020: 3.1p).
Statutory results for the period reflect a one-off non-cash
deferred tax charge of GBP1.8m, following the legislation to
increase the UK corporation tax rate to 25% being enacted, giving a
loss after tax of GBP0.3m (2020: loss GBP0.3m). Basic loss per
share was 0.2p (2020: 0.3p).
Net cash as at 31 October 2021 was GBP1.2m (30 April 2021:
GBP3.0m, 31 October 2020: GBP0.7m), after GBP3.5m of acquisition
and deferred consideration payments in the period.
* The board uses adjusted performance measures to provide
meaningful information on the performance of the business. The
items excluded from our adjusted results are those which arise due
to acquisitions in accordance with IFRS 3. They are not influenced
by the day-to-day operations of the group.
** Profit before tax of GBP2.7m (2020: GBP0.5m) plus
amortisation of intangible assets arising on acquisitions of
GBP2.6m (2020: GBP1.5m) plus transaction costs of GBP2.7m (2020:
GBP3.1m).
*** See reconciliation in note 5.
DIVID
The board is pleased to declare a 10% increase in the interim
dividend to 1.1p (2020: 1.0p), which builds on the increases over
the previous four years and reflects our confidence in sustaining
our financial track record and 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 6 May 2022 to shareholders
on the register on 8 April 2022, with an ex-dividend date of 7
April 2022.
OUTLOOK
The group's strong financial performance in the first six months
leaves the board confident of delivering market expectations* for
the full year, which will represent a year of significant
growth.
As stated above, national insolvency numbers have increased over
the period, as the Government's pandemic support measures have been
removed. As previously guided, we expect our results will have a
second half weighting, as we anticipate insolvency activity will
continue to increase over the remainder of our financial year (to
30 April 2022).
Following our recent acquisitions and organic development of the
group, our broad range of complementary services provide a strong
platform for growth. We continue to progress a pipeline of
acquisition opportunities, which together with organic growth
initiatives across the group, will enable us to build upon our
track record and we remain confident in our outlook for the current
year and beyond.
We will provide an update on third quarter trading in early
March 2022.
* current range of analyst forecasts for adjusted PBT of
GBP17.0m-GBP18.5m (as compiled by the group)
Ric Traynor
Executive chairman
14 December 2021
BUSINESS REVIEW
OPERATING REVIEW
Business recovery and financial advisory
Financial summary
Revenue in the period increased by 48% to GBP38.7m (2020:
GBP26.1m), principally from the first-time contribution from
acquisitions (GBP13.2m), partially offset by lower organic revenues
(GBP0.6m), which reflects the market dynamics in the period of an
increased volume of lower value cases.
Segmental profits for the period increased by 47% to GBP9.7m
(2020: GBP6.6m), with operating margins broadly maintained at
25.1%. Operating costs increased by 48% to GBP28.9m (2020:
GBP19.5m), due to the addition of the operating costs of the
acquired businesses.
Operating review
The strong financial performance in the period reflects the
benefit and integration of the acquisitions in the division
completed since January 2021.
The CVR (January 2021) and DRP (March 2021) acquisitions have
significantly increased the scale of our insolvency business,
notably in the key London marketplace. The integration of both
businesses was completed on target with local teams being merged
into common locations. Both acquisitions have performed well and in
line with expectations.
The MAF Finance Group, which was acquired in May 2021, is a
finance brokerage supporting its clients through arranging
facilities for investment in new asset purchases together with
refinancing existing facilities. Finance broking complements our
advisory and transactional services and will deepen our
relationship with banks and other lenders. Results for the first
six months post acquisition are in line with expectations and
synergy and cross selling opportunities have been identified as the
business has been integrated into the group.
On an organic basis, the results reflect the market challenges
we have experienced since the start of the pandemic, where
Government financial support measures have materially impacted
market volumes. Although insolvency volumes over the six-month
period have increased, this has largely been in liquidations of
smaller companies. The business has performed well against these
market headwinds and increased its market share by volume over the
period to 14% from 10% last year, benefitting from both organic and
acquired growth, across both liquidations and administrations.
The insolvency order book increased to GBP29.0m as at 31 October
2021 (30 April 2021: GBP28.3m, 31 October 2020 GBP20.9m),
reflecting the benefit of acquisitions and our continued market
share gains, and giving confidence on future revenue levels.
Our corporate finance team had a successful six months of deal
completions and has a strong pipeline of transactions for the
second half of our financial year.
Insolvency market
As we have previously reported, the Government's support
measures had a significant impact on insolvency volumes over the
course of the pandemic, from both financial support and temporary
changes in legislation. The number of corporate insolvencies in the
12 months ended 30 September 2021* decreased by 10% to 12,456
(2020: 13,767), or 26% compared to the pre-pandemic position of
16,826 in the 12 months ended 30 September 2019.
Over the course of the last six months the majority of the
support has been removed, with the final measures scheduled to end
in March 2022. This has resulted in an increase in insolvencies to
3,765 in Q3 of calendar 2021 from a low point of 2,374 in Q1 of
calendar 2021.
This increase has largely been from increased numbers of
liquidations (which typically represent insolvencies of smaller
companies), where the volume of appointments has recently returned
to pre-pandemic levels. Although the number of administrations
(which typically involve larger and more complex instructions) has
increased in recent months, they are currently much lower than
pre-pandemic levels. We have increased our share (by volume) of
both market segments in the year.
*Source: The Insolvency Service quarterly statistics on the
number of corporate insolvencies (excluding compulsory
liquidations) in England and Wales on a seasonally adjusted
basis.
Property advisory and transactional services
Financial summary
Revenue in the period increased by 19% to GBP13.6m (2020:
GBP11.4m), reflecting the recovery in activity levels compared to
the lockdown impacted comparative period (GBP1.6m) and the
first-time contribution from acquisitions (GBP0.6m).
Segmental profits for the period increased by 50% to GBP2.4m
(2020: GBP1.6m), with operating margins improving to 17.6% (2020:
14.0%). Operating costs increased to GBP11.2m (2020: GBP9.7m),
which reflects the normalisation of the cost base (following
short-term cost reductions in place during the comparative period)
and acquisitions.
Operating review
The period saw the maintained recovery of the service lines
which had been adversely impacted by lockdown in the comparative
period. Other service lines continued to deliver financial
performance in line with expectations. We have continued to invest
in the recruitment of fee earners, in both our transactional and
advisory services, to strengthen our client offer in key areas.
This has broadened our client base which is further enhanced by
increased opportunities from public sector frameworks.
The HNG acquisition (completed February 2021) has enhanced our
property management, agency and lease advisory services. The team
has now been fully integrated into the division, having merged with
the original Eddisons team in London. Its contribution is likely to
be second half weighted reflecting a number of current
projects.
In October 2021, we expanded our operations in South Yorkshire
through the acquisition of the team from Fernie Greaves Chartered
Surveyors who have joined our existing Sheffield team. This
acquisition has broadened our reach across South Yorkshire and the
East Midlands.
We continue to seek opportunities to invest in the division
through senior recruitment, in addition to seeking further
acquisitions.
FINANCE REVIEW
Financial summary
2021 2020
GBPm GBPm
Revenue 52.3 37.5
------------------------------------------- ----- -----
Operating profit (before transaction costs
and amortisation) 8.4 5.4
Finance costs (0.4) (0.4)
------------------------------------------- ----- -----
Adjusted profit before tax 8.0 5.0
Transaction costs (2.7) (3.1)
Amortisation of intangible assets arising
on acquisitions (2.6) (1.5)
------------------------------------------- ----- -----
Profit before tax 2.7 0.5
Tax on profits on ordinary activities (1.2) (0.8)
Deferred tax charge due to change in tax
rate (1.8) -
------------------------------------------- ----- -----
Statutory loss for the period (0.3) (0.3)
------------------------------------------- ----- -----
Operating result (before transaction costs and amortisation)
Revenue in the period increased by GBP14.8m to GBP52.3m (2020:
GBP37.5m), an overall increase of 39% (36% acquired).
Revenue (GBPm) Profit (GBPm)
2021 2020 growth 2021 2020 growth
------------------------------------- ----- ----- -------- ------ ------ -------
Business recovery and financial
advisory 38.7 26.1 48% 9.7 6.6 47%
Property advisory and transactional
services 13.6 11.4 19% 2.4 1.6 50%
Shared and central costs - - - (3.6) (2.7) 33%
------------------------------------- ----- ----- -------- ------ ------ -------
Total 52.3 37.5 39% 8.4 5.4 53%
------------------------------------- ----- ----- -------- ------ ------ -------
Operating margins increased in the period to 16.0% (2020:
14.4%), reflecting the recovery in margins in property and
transactional services (as noted in the operating review), together
with shared and central costs reducing as a percentage of group
revenue to 6.9% (2020: 7.2%).
Adjusted profit before tax increased by 60% to GBP8.0m (2020:
GBP5.0m) in the period from the increased operating profit, with
finance costs in line with the prior period.
Tax
The overall tax charge for the period was GBP3.0m (2020:
GBP0.8m) as detailed below:
2021 2020
Profit Tax Profit Effective Profit Tax Profit Effective
before after rate before after rate
tax tax tax tax
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
Adjusted 8.0 (1.7) 6.3 21% 5.1 (1.1) 4.0 21%
Transaction
costs (2.7) - (2.7) - (3.1) - (3.1) -
Amortisation (2.6) 0.5 (2.1) 19% (1.5) 0.3 (1.2) 19%
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
Tax on ordinary
activities 2.7 (1.2) 1.5 43% 0.5 (0.8) (0.3) 160%
Deferred
tax charge
from change
in rate - (1.8) (1.8) - - - - -
Statutory 2.7 (3.0) (0.3) 107% 0.5 (0.8) (0.3) 172%
----------------- -------- ------ ------- ---------- -------- ------ ------- ----------
The adjusted tax rate of 21% is based on the expected rate for
the full year.
The deferred tax charge of GBP1.8m is a one-off non-cash charge,
resulting from an increase in deferred tax liabilities following
the legislation to increase the UK corporation tax rate to 25%
being enacted during the period.
Earnings per share
Adjusted basic earnings per share* increased by 32% to 4.1p
(2020: 3.1p).
Statutory results for the period, reflect the one-off non-cash
deferred tax charge noted above and non-cash transaction costs and
amortisation, giving a basic loss per share of 0.2p (2020: loss per
share 0.3p).
* See reconciliation in note 5
Partners and employees
The average number of full-time equivalent (FTE) partners and
staff working in the group increased due to both acquisitions and
organic investment.
2021 2020
Business Property Shared Total Business Property Shared Total
recovery advisory and recovery advisory and
and financial and support and and support
advisory transactional teams financial transactional teams
services advisory services
------------- --------------- ---------------- --------- ------ ----------- ----------------- --------- ------
Partners 85 - - 85 63 - - 63
Staff 400 260 - 660 254 230 - 484
------------- --------------- ---------------- --------- ------ ----------- ----------------- --------- ------
Fee earners 485 260 - 745 317 230 - 547
Support
teams 64 10 76 150 39 5 65 109
------------- --------------- ---------------- --------- ------ ----------- ----------------- --------- ------
Total 549 270 76 895 356 235 65 656
------------- --------------- ---------------- --------- ------ ----------- ----------------- --------- ------
The ratio of our support teams to fee earning partners and staff
is maintained at 5.0 (2020: 5.0).
Financing
The group has maintained its strong financial position with net
cash of GBP1.2m as at 31 October 2021 (30 April 2021: GBP3.0m, 31
October 2020: GBP0.7m), after GBP3.5m of acquisition and deferred
consideration payments in the period. We have significant levels of
headroom within our bank facilities which are committed until
August 2023 and comprise a GBP25m unsecured, committed revolving
credit facility and a GBP5m uncommitted acquisition facility.
During the period, all bank covenants were comfortably met.
Free cash flow in the period reduced to GBP3.1m (2020: GBP6.0m).
Net cash from operating activities in the period was GBP4.9m (2020:
GBP7.5m) reflecting increased adjusted pre-tax profits of GBP3.0m
offset by increased tax payments (GBP0.6m) and working capital
(GBP2.6m). Furthermore, prior year cash flow benefitted from
GBP2.7m of deferred VAT payments (which were settled in the second
half of the year).
Cash flow in the period is summarised as follows:
2021 2020
GBPm GBPm
Net cash from operating activities (before
deemed remuneration) 5.4 7.5
Capital expenditure (0.4) (0.3)
Capital element of lease payments (1.8) (1.2)
------------------------------------------- ----- -----
Free cash flow 3.2 6.0
Acquisition payments (2.2) (0.4)
Deferred consideration payments (1.3) (1.1)
Dividends (1.5) (1.1)
Net cash (outflow) inflow (1.8) 3.4
------------------------------------------- ----- -----
Net assets
Net assets as at 31 October 2021 were GBP83.1m, compared to
GBP86.3m as at 30 April 2021. The movement represents an increase
of GBP6.3m from post-tax adjusted earnings and GBP1.7m from the
issue of new shares; offset by dividends of GBP4.6m, the post-tax
impact of acquisition-related transaction and amortisation costs of
GBP4.8m and a one-off
non-cash deferred tax charge of GBP1.8m as noted above.
Ric Traynor Nick Taylor
Executive chairman Group finance director
14 December 2021 14 December 2021
Consolidated statement of comprehensive
income
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
--------------------------------------- ----- ------------ ------------ ----------
Revenue 2 52,268 37,493 83,831
Direct costs (30,196) (21,876) (48,281)
--------------------------------------- ----- ------------ ------------ ----------
Gross profit 22,072 15,617 35,550
Other operating income 99 114 179
Administrative expenses (19,065) (14,841) (32,939)
--------------------------------------- ----- ------------ ------------ ----------
Operating profit before amortisation
and transaction costs 2 8,441 5,468 12,394
Transaction costs 3 (2,686) (3,099) (6,546)
Amortisation of intangible assets
arising on acquisitions (2,649) (1,479) (3,058)
--------------------------------------- ----- ------------ ------------ ----------
Operating profit 3,106 890 2,790
Finance costs 4 (413) (439) (883)
Profit before tax 2,693 451 1,907
--------------------------------------- ----- ------------ ------------ ----------
Tax on profits on ordinary activities (1,207) (775) (1,754)
Deferred tax charge due to change (1,817) - -
in tax rate
--------------------------------------- ----- ------------ ------------ ----------
Total tax charge (3,024) (775) (1,754)
--------------------------------------- ----- ------------ ------------ ----------
(Loss) profit and total comprehensive
(loss) income for the period (331) (324) 153
--------------------------------------- ----- ------------ ------------ ----------
Earnings per share
Basic 5 (0.2)p (0.3)p 0.1p
Diluted 5 (0.2)p (0.2)p 0.1p
--------------------------------------- ----- ------------ ------------ ----------
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 Share Share Merger Capital Retained Total
2021 (unaudited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2021 7,547 29,325 25,974 304 23,100 86,250
Total comprehensive income for
the period - - - - (331) (331)
Dividends - - - - (4,553) (4,553)
Shares issued as consideration
for acquisitions 42 - 958 - - 1,000
Credit to equity for equity-settled
share-based payments - - - - 717 717
Other share options 21 10 - - - 31
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 31 October 2021 7,610 29,335 26,932 304 18,933 83,114
------------------------------------- --------- --------- --------- ------------ ---------- --------
For the six months ended 31 October Share Share Merger Capital Retained Total
2020 (unaudited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2020 6,386 29,459 23,927 304 5,495 65,571
Total comprehensive income for the
period - - - - (324) (324)
Dividends - - - - (3,579) (3,579)
Transfer from share premium account - (20,000) - - 20,000 -
Credit to equity for equity-settled
share-based payments - - - - 287 287
Other share options 1 - - - (1) -
At 31 October 2020 6,387 9,459 23,927 304 21,878 61,955
------------------------------------- --------- --------- --------- ------------ ---------- --------
For the year ended 30 April 2021 Share Share Merger Capital Retained Total
(audited) capital premium reserve redemption earnings equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- --------- ------------ ---------- --------
At 1 May 2020 6,386 29,459 23,927 304 5,495 65,571
Total comprehensive income for the
period - - - - 153 153
Dividends - - - - (3,579) (3,579)
Transfer from share premium account - (20,000) - - 20,000 -
Credit to equity for equity-settled
share-based payments - - - - 1,031 1,031
Shares issued as consideration for
acquisitions 95 - 1,905 - - 2,000
Shares issued as deferred consideration 8 - 142 - - 150
Placing shares issued 1,043 19,852 - - - 20,895
Other share options 15 14 - - - 29
----------------------------------------- --------- --------- --------- ------------ ---------- --------
At 30 April 2021 7,547 29,325 25,974 304 23,100 86,250
----------------------------------------- --------- --------- --------- ------------ ---------- --------
Consolidated balance sheet
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
---------------------------------- ----- ------------- ------------- -----------
Non-current assets
Intangible assets 77,348 58,289 77,637
Property, plant and equipment 1,900 1,715 2,069
Right of use assets 6,131 6,624 7,502
Trade and other receivables 7 4,331 4,016 3,970
---------------------------------- ----- ------------- ------------- -----------
89,710 70,644 91,178
---------------------------------- ----- ------------- ------------- -----------
Current assets
Trade and other receivables 7 49,949 37,742 45,425
Cash and cash equivalents 7,171 7,672 7,986
57,120 45,414 53,411
---------------------------------- ----- ------------- ------------- -----------
Total assets 146,830 116,058 144,589
---------------------------------- ----- ------------- ------------- -----------
Current liabilities
Trade and other payables 8 (38,093) (29,258) (33,273)
Current tax liabilities (2,109) (1,558) (2,612)
Lease liabilities (2,572) (2,224) (2,975)
Provisions (520) (1,079) (566)
(43,294) (34,119) (39,426)
---------------------------------- ----- ------------- ------------- -----------
Net current assets 13,826 11,295 13,985
---------------------------------- ----- ------------- ------------- -----------
Non-current liabilities
Borrowings (6,000) (7,000) (5,000)
Lease liabilities (4,583) (5,661) (5,846)
Provisions (2,521) (1,594) (2,609)
Deferred tax (7,318) (5,729) (5,458)
---------------------------------- ----- ------------- ------------- -----------
(20,422) (19,984) (18,913)
---------------------------------- ----- ------------- ------------- -----------
Total liabilities (63,716) (54,103) (58,339)
---------------------------------- ----- ------------- ------------- -----------
Net assets 83,114 61,955 86,250
---------------------------------- ----- ------------- ------------- -----------
Equity
Share capital 7,610 6,387 7,547
Share premium 29,335 9,459 29,325
Merger reserve 26,932 23,927 25,974
Capital redemption reserve 304 304 304
Retained earnings 18,933 21,878 23,100
---------------------------------- ----- ------------- ------------- -----------
Equity attributable to owners of
the company 83,114 61,955 86,250
---------------------------------- ----- ------------- ------------- -----------
Consolidated cash flow statement
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
---------------------------------------- ----- ------------- ------------- -----------
Cash flows from operating activities
Cash generated by operations 9 4,084 8,108 16,162
Income taxes paid (1,708) (1,127) (2,273)
Interest paid on borrowings (154) (184) (342)
Interest paid on lease liabilities (238) (248) (506)
---------------------------------------- ----- ------------- ------------- -----------
Net cash from operating activities
(before deemed remuneration payments) 5,304 7,453 16,236
Deemed remuneration payments (3,320) (904) (3,195)
---------------------------------------- ----- ------------- ------------- -----------
Net cash from operating activities 1,984 6,549 13,041
---------------------------------------- ----- ------------- ------------- -----------
Investing activities
Purchase of intangible fixed
assets (43) (27) (307)
Purchase of property, plant and
equipment (308) (282) (997)
Acquisition of businesses (345) (350) (22,033)
Deferred consideration payments (50) (150) (150)
Net cash acquired in acquisition
of businesses 220 - 1,522
---------------------------------------- ----- ------------- ------------- -----------
Net cash from investing activities (526) (809) (21,965)
---------------------------------------- ----- ------------- ------------- -----------
Financing activities
Dividends paid (1,509) (1,149) (3,579)
Net proceeds on issue of shares 31 - 20,923
Repayment of obligations under
leases (1,795) (1,166) (2,681)
Drawdown (repayment) of loans 1,000 (3,000) (5,000)
Net cash from financing activities (2,273) (5,315) 9,663
---------------------------------------- ----- ------------- ------------- -----------
Net (decrease) increase in cash
and cash equivalents (815) 425 739
Cash and cash equivalents at
beginning of period 7,986 7,247 7,247
---------------------------------------- ----- ------------- ------------- -----------
Cash and cash equivalents at
end of period 7,171 7,672 7,986
---------------------------------------- ----- ------------- ------------- -----------
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 2021, 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 2021 were approved by the board of directors on
19 July 2021 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 2021 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 2021.
2. Segmental analysis by class of business
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------ ------------- ------------- -----------
Revenue
Business recovery and financial advisory 38,653 26,146 59,697
Property advisory and transactional
services 13,615 11,347 24,134
------------------------------------------ ------------- ------------- -----------
52,268 37,493 83,831
------------------------------------------ ------------- ------------- -----------
Operating profit before amortisation
and transaction costs
Business recovery and financial advisory 9,693 6,571 14,721
Property advisory and transactional
services 2,388 1,554 3,875
Shared and central costs (3,640) (2,657) (6,202)
------------------------------------------ ------------- ------------- -----------
8,441 5,468 12,394
------------------------------------------ ------------- ------------- -----------
3. Transaction costs
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------- ------------- -----------
Deemed remuneration 4,692 2,614 5,449
Acquisition costs 109 41 439
Gain on acquisition (2,115) (1) (231)
Charge relating to the put and call
option over Begbies Traynor (London)
LLP - 445 889
2,686 3,099 6,546
--------------------------------------- ------------- ------------- -----------
4. Finance costs
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------- ------------- -----------
Interest on bank loans 175 191 377
Finance charge on lease liabilities 207 217 441
Finance charge on dilapidations provisions 31 31 65
-------------------------------------------- ------------- ------------- -----------
413 439 883
-------------------------------------------- ------------- ------------- -----------
5. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------- ------------- -----------
Earnings
Profit for the period attributable to
equity holders (331) (324) 153
--------------------------------------- ------------- ------------- -----------
31 October 31 October 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
number number number
'000 '000 '000
-------------------------------------------- ------------------ ------------------ ----------------
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 154,423 129,374 132,963
Effect of dilutive potential ordinary
shares:
Share options 6,221 4,438 4,421
Contingent shares - 158 -
-------------------------------------------- ------------------ ------------------ ----------------
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 160,644 133,970 137,384
-------------------------------------------- ------------------ ------------------ ----------------
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
pence pence pence
---------------------------- ------------- ------------- -----------
Basic earnings per share (0.2) (0.3) 0.1
Diluted earnings per share (0.2) (0.2) 0.1
---------------------------- ------------- ------------- -----------
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 Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------- ------------- -----------
Earnings
Profit for the period attributable to
equity holders (331) (324) 153
Amortisation of intangible assets arising
on acquisitions 2,649 1,479 3,058
Transaction costs 2,686 3,099 6,546
Tax effect of above items (503) (282) (581)
Impact of change in tax rate on deferred 1,817 - -
tax liabilities
Adjusted earnings 6,318 3,972 9,176
------------------------------------------- ------------- ------------- -----------
Six months Six months Year ended
ended ended
31 October 31 October 30 April
2021 2020 2021
(unaudited) (unaudited) (audited)
pence pence pence
------------------------------------- ------------- ------------- -----------
Adjusted basic earnings per share 4.1 3.1 6.9
Adjusted diluted earnings per share 3.9 3.0 6.7
------------------------------------- ------------- ------------- -----------
6. Dividends
The interim dividend of 1.1p (2020: 1.0p) per share (not
recognised as a liability at 31 October 2021) will be payable on 6
May 2022 to ordinary shareholders on the register at 8 April 2022.
The final dividend of 2.0p per share as proposed in the 30 April
2021 financial statements and approved at the group's AGM was paid
on 4 November 2021 and was recognised as a liability at 31 October
2021.
7. Trade and other receivables
31 October 31 October 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------------ ------------------ ----------------
Non current
Deemed remuneration 4,331 4,016 3,970
------------------------------- ------------------ ------------------ ----------------
Current
Trade receivables 9,416 6,457 8,069
Unbilled income 32,879 24,783 32,432
Other debtors and prepayments 4,937 3,051 2,573
Deemed remuneration 2,717 3,451 2,351
------------------------------- ------------------ ------------------ ----------------
49,949 37,742 45,425
------------------------------- ------------------ ------------------ ----------------
8. Trade and other payables
31 October 31 October 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
--------------------------------- ------------------ ------------------ ----------------
Current
Trade payables 1,967 931 1,387
Accruals 6,997 5,766 6,899
Final dividend 3,044 2,430 -
Other taxes and social security 4,234 5,981 4,385
Deferred income 6,027 4,250 5,520
Other creditors 14,030 9,098 14,337
Deferred consideration 325 125 375
Deemed remuneration liabilities 1,469 677 370
--------------------------------- ------------------ ------------------ ----------------
38,093 29,258 33,273
--------------------------------- ------------------ ------------------ ----------------
We have reclassified GBP1,827,000 at 31 October 2020 and
GBP4,511,000 at 30 April 2021 from accruals to other creditors
which are liabilities in respect of members of the group's
LLPs.
9. Reconciliation to the cash flow statement
31 October 31 October 30 April
2021 (unaudited) 2020 (unaudited) 2021 (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------------- ------------------ ------------------ ----------------
(Loss) profit for the period (331) (324) 153
Adjustments for:
Tax 3,024 775 1,754
Finance costs 413 439 883
Amortisation of intangible assets 2,737 1,540 3,180
Depreciation of property, plant and equipment 532 366 841
Depreciation of right of use assets 1,346 1,079 2,617
Impairment of right of use asset - - 579
Reversal of impairment of right of use asset - - (228)
Gain on acquisition (2,115) (1) (231)
Share-based payment expense 717 287 1,031
Deemed remuneration obligations settled through
equity 1,000 - 150
(Decrease) increase in deemed remuneration
receivable (727) 1,613 2,759
Increase in deemed remuneration liabilities 1,100 543 236
Operating cash flows before movements in
working capital 7,696 6,317 13,724
Increase in receivables (3,906) (1,944) (2,683)
Increase in payables 274 3,880 5,400
Increase (decrease) in provisions 20 (145) (279)
Cash generated by operations 4,084 8,108 16,162
------------------------------------------------- ------------------ ------------------ ----------------
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END
IR DKNBQFBDDOBD
(END) Dow Jones Newswires
December 14, 2021 02:00 ET (07:00 GMT)
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