Btg Consulting Plc · LSE:BTG
Btg Consulting — Begbies Traynor Group — FY2020 Earnings Presentation
34 slides from Btg Consulting's earnings presentation, July 2020
Slide 1: Full year results presentation
Full year results presentation Ric Traynor – Executive Chairman Nick Taylor – Group Finance Director July 2020
Slide 2: A leading professional services consultancy
A leading professional services consultancy Corporate and personal insolvency Corporate finance Financial advisory We handle the largest number of corporate Buy and sell side support on Business and financial restructuring, debt advisory, appointments in the UK, principally serving the corporate tra
Slide 3: Highlights - strong financial performance
Highlights - strong financial performance REVENUE £70.5m (+17%) (2019: £60.1m) • Revenue growth of 17% (5% organic) • All areas of the group performed well ADJUSTED PROFIT BEFORE TAX • Strong operating cash flow and share placing £9.2m (+31%) (2019: £7.0m) • enabled reduction in net debt and leverag
Slide 4: Operating and finance review
Operating and finance review 3
Slide 5: Financial highlights
Financial highlights £m 2020 2019 Revenue 70.5 60.1 Operating profit (before amortisation and transaction costs) 10.1 8.0 Margin 14.4% 13.3% Adjusted profit before tax 9.2 7.0 Adjusted basic EPS 5.7p 4.8p Dividend per share 2.8p 2.6p Net debt 2.8 6.0 • Revenue increase of 17% in the year (5% organic
Slide 6: Segmental analysis
Segmental analysis £’000 2020 2019 Revenue Business recovery and financial advisory 49,630 43,313 Property services 20,873 16,745 Total 70,503 60,058 Operating profit Business recovery and financial advisory 11,588 8,889 Margin 23.4% 20.6% Property services 3,860 3,826 Margin 18.5% 22.8% Segmental r
Slide 7: COVID-19 impact and response
COVID-19 impact and response • Remote working quickly enabled, enhanced by investment in digital capabilities • on-line auctions, electronic document management, IT infrastructure, digital marketing • Business recovery and financial advisory • continue to be appointed on and progress cases, realise
Slide 8: Business recovery and financial advisory
Business recovery and financial advisory • Revenue growth of 15% (8% organic) • Increased insolvency appointments • Strong performance from advisory team • Contribution from current and prior year acquisitions • Margins increased to 23.4% (2019: 20.6%) • Strengthened insolvency team through 19 • Rec
Slide 9: Property advisory and transactional services
Property advisory and transactional services • Revenue growth of 25% from current and prior year acquisitions • Organic revenue broadly in line with prior year • Growth offset by anticipated reduction from prior year completion of several property insolvencies • Margins of 18.5% (2019: 22.8%, enhanc
Slide 10: Significant liquidity and strong financial position
Significant liquidity and strong financial position 7.8 (9.1) • Strong financial position – reduced net debt and improved leverage to 0.3x (2019: 0.7x) • Significant liquidity entering the new financial year • Cash of £7.2m (2019: £4.0m) with undrawn committed borrowing facilities of £15.0m (2019: £
Slide 11: Current trading and outlook
Current trading and outlook • Short term Government support measures helping companies to continue trading • Anticipate removal of support will increase distress which is likely to lead to increased insolvencies • Business recovery and financial advisory start year in strong position to deliver furt
Slide 12: Strategic review
Strategic review O Begbies Traynor Group a
Slide 13: Strategy
Strategy To enhance shareholder value through the delivery of strong, sustainable financial performance Organic growth Acquisition strategy • Retention and development of our existing partners and • Value-accretive acquisitions in any of the following market employees segments • Recruitment of new t
Slide 14: Insolvency market
Insolvency market Total corporate appointments • Key factors in current market 31,000 • Significant Government support for corporates • Lack of creditor pressure – HMRC, banks, landlords 26,500 • Reduced operational running of courts 22,000 Reces sion • Short-term disruption during lockdown 19 17,50
Slide 15: Business recovery and advisory – platform for growth
Business recovery and advisory – platform for growth • Strong market presence and reputation • Local office network gives market leadership in SME market • Strong reputation and expertise gives access to larger cases • Extensive network of national work referrers • Leading digital marketing activity
Slide 16: Business recovery and advisory – multiple growth drivers
Business recovery and advisory – multiple growth drivers • Recent growth across all case sizes • Case profile includes large fee cases in addition to volume cases • Increase in order book due to organic growth and acquisitions • Advisory adds complementary expertise and introductions to larger insol
Slide 17: Adding value for our clients through our integrated expertise
Adding value for our clients through our integrated expertise • Insolvency appointment of retail chain with 17 stores and 100 employees • Eddisons valued the property portfolio and then instructed as joint agents to maximise exposure and value for the estate • Property realisations significantly ahe
Slide 18: Property – growing client base and referral network
Property – growing client base and referral network • Strength of referral network and client base leads to high levels of repeat business • Significant insolvency expertise • Plant and machinery valuation and disposal • Property – receivership, auctions and agency • Specialist insurance broker – pr
Slide 19: Well placed due to counter-cyclical focus
Well placed due to counter-cyclical focus 18
Slide 20: Summary and outlook
Summary and outlook • New financial year started six weeks into the lockdown • Currently seeing unwinding of restrictions and resulting increases in economic activity • Overall, anticipate trading for new financial year will have greater weighting to H2 than in recent years • Will provide update on
Slide 21: Investment case
Investment case • Strong track record of cash generative, profitable growth with a well-established progressive dividend policy • AIM listed since 2004 • highly experienced board and senior management team • long-established corporate structure with separation of equity, management and fee earners •
Slide 22: Questions
Questions O Begbies Traynor Group 21
Slide 23: Appendix
Appendix O Begbies Traynor Group 22
Slide 24: Business recovery
Business recovery • UK’s leading independent business recovery • Basis of remuneration practice • Typically on the basis of hours worked with fees paid from asset realisations • Handle the largest number of corporate appointments in the UK • In limited occasions based on a percentage of asset realis
Slide 25: Marketplace
Marketplace Firms Largest appointment takers 2019 Big 4 accountancy firms Begbies Traynor* 1,405 American boutiques Alvarez & Marsal, FTI, Alix Partners, Duff & Phelps FRP 558 National accountancy firms Leonard Curtis 534 Grant Thornton, BDO, RSM National specialists Quantuma 419 Begbies Traynor, FR
Slide 26: Financial advisory
Financial advisory • Services: • Clients: • Corporate finance - Buy and sell side support on corporate • Businesses transactions • Legal and professional community • Forensic accounting and investigations - fraud and financial • Banks and financial institutions crime investigations, expert witness f
Slide 27: Property services
Property services • Services • Clients • Valuations • banks and financial institutions, insolvency practitioners, • valuation of property, small to medium sized businesses, commercial property owners and occupiers, property agents, machinery and business assets public sector bodies, property develop
Slide 28: Acquisition history
Acquisition history 2019 2019 2019 2019 ALJ Ernest Wilson Regeneratus BSM (Insolvency) (Business sales agency) (Advisory) (Chartered surveyors) Revenue: £3.1m Revenue: £2.2m Revenue: £0.6m Revenue: £3.1m Profit: £0.9m Profit: £0.7m Profit: £0.2m Profit: £0.6m 2019 2019 2018 2018 KRE and Dunion Croft
Slide 29: Current year acquisitions
Current year acquisitions • Business recovery and financial advisory Alexander Lawson Jacobs (ALJ) – 24 October 2019 • Initial consideration of £2.35m (£2.1m cash and £0.25m shares) with contingent consideration of up to £4.0m • Pre acquisition trading: revenue £3.1m and pre-tax profit £0.9m • Pos
Slide 30: Ownership structure
Ownership structure The group has 127.7m shares in issue. The ownership profile is: Name % holding Ric Traynor 21.3 Other management 5.8 Major institutions: • OVMK Vermogensbeheer 5.6 • Close Brothers 5.4 • Amati Global Investors 5.4 • Hendrik Marius Van Heijst 4.0 • Nordea Asset Management 2.9 • Pr
Slide 31: FY21 financial guidance
FY21 financial guidance • Business recovery and advisory • Strong position for growth – increased order book and recent investments • Expect increase in market levels as support measures withdrawn later in the year • Property - anticipate improving performance over course of year • Anticipated incre
Slide 32: IFRS 16 'Leases'
IFRS 16 ‘Leases’ • Adopted on a fully retrospective basis – full restatement of comparatives • Key changes: At lease inception: Right of use asset recognised - present value of future lease payments + initial direct costs + estimate of dilapidation costs under lease Lease liabilities - present
Slide 33: IFRS 16 'Leases' – impact on reported numbers
IFRS 16 ‘Leases’ – impact on reported numbers Immaterial impact on profit before tax Modest reduction in net assets No impact on total cash flow £m 12 months 12 months Apr 20 Apr 19 Income statement Operating profit 0.4 0.4 Finance costs (0.5) (0.5) Profit before tax (0.1) (0.1) Balance sheet
Slide 34: Offices across the UK
Offices across the UK. www.begbies-traynorgroup.com Begbies Traynor Group plc; registered in England No: 5120043, registered office: 340 Deansgate, Manchester, M3 4LY, a member of the Begbies Traynor Group; Specialist Professional Services.