Btg Consulting Plc · LSE:BTG
Btg Consulting — Begbies Traynor Group — FY2017 Earnings Presentation
30 slides from Btg Consulting's earnings presentation, July 2017
Slide 1: Full year results presentation
Full year results presentation Ric Traynor – Executive Chairman Nick Taylor – Group Finance Director July 2017
Slide 2: About us
About us We are a leading business recovery, financial advisory and property services Office Locations consultancy Business recovery and financial advisory Begbies Traynor - UK’s leading independent business recovery practice largest number of corporate appointments serving the mid-market
Slide 3: Financial highlights
Financial highlights Revenue Adjusted Adjusted Total PBT EPS dividend £49.7m £4.9m 3.3p 2.2p (2016: £50.1m) (2016: £4.5m) (2016: 3.2p) (2016: 2.2p) Business Property Operating Net debt recovery services cash flow £10.3m profit profit £8.0m £7.4m £2.9m (2016: £7.5m) (2016: £2.4m) (2016: £7.9m) (2016:
Slide 4: Overview
Overview • A year of further progress in developing the group with earnings in line with expectations • Business recovery and financial advisory services - solid performance: • Profits broadly maintained in spite of lowest level of corporate insolvencies since 2004 • Increased operating margins to 2
Slide 5: Solid track record
Solid track record Revenue £49.7m 45.5 50.1 49.7 4.6 12.4 13.5 37.7 36.2 2015 20162017 BB Property BB Business recovery Adjusted profit Adjusted EPS Dividend Net debt before tax £4.9m 3.3p 2.2p £10.3m 49 33 16 12.8 10.4 § 103 3.6 29 06 2015-2016 .2017 20152016 = 2017 2015-2016 )=— 2017 2015-2016 =—-
Slide 6: Financial review
Financial review O Begbies Traynor Group
Slide 7: Income statement
Income statement £000 Year ended Year ended Apr 17 Apr 16 Revenue 49,685 50,135 Operating profit (before amortisation and transaction 5,627 5,488 costs) Interest costs (776) (999) Adjusted profit before tax 4,851 4,489 Refinancing costs (225) - Transaction costs * (1,545) (790) Amortisation (2,439)
Slide 8: Operating profit bridge
Operating profit bridge £m FY16 Acquisitions Business recovery and Property FY17 advisory Pugh Taylors Insolvency Increase in Insolvency Increase in Contract reductions advisory reductions advisory exits Revenue 50.1 2.0 0.9 (2.7) 1.2 (1.2) 0.3 (0.9) 49.7 Costs (44.6) (1.3) (0.8) 1.9 (0.8) 0.7 (0.1)
Slide 9: Balance sheet
Balance sheet £m Apr 17 Apr 16 • Current assets reduced to £29.8m (2016: £34.5m): • Receivables and unbilled income £26.2m (2016: £29.1m) Non current assets 60.0 60.4 • Other debtors and prepayments £2.9m (2016: £4.3m) • Deemed remuneration £0.7m (2016: £1.1m) Current assets 29.8 34.5 • Liabilities
Slide 10: Cash flow
Cash flow £m Year ended Year ended • Operating: Apr 17 Apr 16 • Strong operating cash generation maintained in the year • Interest payments include £0.3m of refinancing payments Cash from operations 8.0 7.9 • Tax payments increased as a result of tax rebate in prior year Interest (0.9) (1.0) • Inves
Slide 11: New five year bank facilities agreed
New five year bank facilities agreed • New facilities agreed in the year with August 2021 maturity date • Previous £30m facilities replaced by: • £25m committed revolving credit facility • £5m uncommitted acquisition facility • Provided by HSBC solely on an unsecured basis, in place of previous thre
Slide 12: 2017/18 outlook
2017/18 outlook • Business recovery: • Improved activity levels in calendar 2017, with first quarter showing growth on the 2016 comparative • If sustained throughout the year, then we anticipate an increase in earnings in our insolvency-related activities • Anticipate a typical summer period of lowe
Slide 13: Financial guidance
Financial guidance • Adjusted tax rate 26% (FY17: 27%) • Transaction/amortisation costs: • Deemed remuneration (inc London option charges) £2.0m • Amortisation £1.8m • Cash outflows: • Deferred income unwind £0.5m • Provisions outflows of £0.5m • Tax payments: FY17 provision £0.8m and two payments o
Slide 14: Operating review
Operating review O Begbies Traynor Group 13
Slide 15: Business recovery and financial advisory
Business recovery and financial advisory • Insolvency market • Calendar year 2016 broadly flat at 14,736 (2015: 14,657) FY17 FY16 • Lowest level of appointments since 2004 Revenue (£m) 36.2 37.7 • First calendar quarter of 2017 appointments of 4,157, 8% increase on 2016 (2016: 3,842) Profit (£m) 7.4
Slide 16: Property services
Property services • Strong revenue and profit growth from acquisitions partially offset by: FY17 FY16 • Reduced insolvency activity; and Revenue (£m) 13.5 12.4 • Prior year exit from low margin contracts • Eddisons working on a number of Begbies Traynor Profit (£m) 2.9 2.4 insolvency appointments le
Slide 17: Strategic overview
Strategic overview O Begbies Traynor Group 16
Slide 18: Strategy
Strategy Strategy To be recognised as a leading UK professional services consultancy business recovery l financial advisory l property advisory services Developing our specialisms Business Commercial restructuring property and insolvency management Individuals Businesses Transactional Valuations & s
Slide 19: Our expertise
Our expertise Business restructuring and insolvency •Corporate recovery % of revenue •Personal insolvency •Restructuring •Property receiverships •Specialist insurance broking Business Valuation and advisory services restructuring and insolvency •Due diligence •Debt advisory 7% Valuation and •Forensi
Slide 20: Market position
Market position Business recovery and financial advisory Property services Number of corporate appointments FY17 • Market place • Eddisons is a top 25 firm by revenue Begbies Traynor 932 • Top 10 firms (including CBRE, JLL, Savills) have revenue of £100m to £990m with a significant Leonard Curtis 40
Slide 21: Multiple growth opportunities
Multiple growth opportunities • Business recovery and financial advisory • Strong and mature market position • High margins and good operating cash flows • Growth opportunity from senior recruitment to increase advisory expertise and proportion of non-insolvency revenues • Well placed in event of cy
Slide 22: Outlook
Outlook O Begbies Traynor Group 21
Slide 23: Outlook
Outlook • Anticipate a growth in earnings in the new financial year if recent increase in insolvency activity levels is sustained • New bank facilities provide the financial strength and flexibility to execute our strategy • Continue to review acquisition and organic growth opportunities in both div
Slide 24: Investment summary
Investment summary • A leading UK professional services consultancy with two complementary and profitable divisions: • Business recovery and financial advisory - UK’s leading independent business recovery practice • Property services - national chartered surveyors delivering specialist property serv
Slide 25: Appendix
Appendix O Begbies Traynor Group 24
Slide 26: Ownership structure
Ownership structure The group has 106.7m shares in issue. The ownership profile is: Name % holding Ric Traynor 25.4% Other management 4.6% Major institutions: • Hof Hoorneman Bankiers 11.1% • Fidelity 9.9% • Theodoor Gilissen 6.3% • Allianz Global Investors 6.0% • Close Brothers 3.4% 25
Slide 27: Pugh & Co acquisition
Pugh & Co acquisition • Acquisition of Pugh & Co in June 2016 • Property auction business • Regular auctions held in Leeds and Manchester • Consideration: • Initial cash of £2.0m • Contingent of up to £2.6m based on financial performance of the combined business: • £0.25m (cash or shares) based on y
Slide 28: Profile of our insolvency caseload
Profile of our insolvency caseload 6,000 £5,448 5,000 4,000 Volume 3,000 2,000 £31,193 1,000 £59,327 £84,688 £251,661 - £20k £20 - £50k £50 - £75k £75k - £100k >£100k * As at 30 April 2017 27
Slide 29: Who we are and what we do
Who we are and what we do Oo Begbies Traynor oO BTG Financial Consulting Eddisons Begbies Traynor is the UK's leading independent business recovery practice handling the largest number of corporate appointments, principally serving the mid-market and smaller companies. £4 Insolvency - Corporate and
Slide 30: 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.