Btg Consulting Plc · LSE:BTG
Btg Consulting — Begbies Traynor Group — FY2019 Earnings Presentation
30 slides from Btg Consulting's earnings presentation, July 2019
Slide 1: Full year results presentation
Full year results presentation Ric Traynor – Executive Chairman Nick Taylor – Group Finance Director July 2019
Slide 2: About Begbies Traynor Group plc
About Begbies Traynor Group plc 1
Slide 3: Highlights - strong financial performance in line with upgraded expectations
Highlights - strong financial performance in line with upgraded expectations REVENUE £60.1m (+15%) (2018: £52.4m) • Revenue growth of 15% (9% organic) • Improved operating margin to 12.6% (2018: ADJUSTED PROFIT BEFORE TAX 11.6%) £7.1m (+27%) (2018: £5.6m) • Completed four acquisitions • Strong cash
Slide 4: Recent achievements - strong five year financial performance
Recent achievements - strong five year financial performance • Strategy to increase scale and quality of our businesses: • Delivered consecutive years of profit and EPS growth over last four years • Compound growth of 14% in EPS since 2015, accelerated to 22% since 2017 • Strong operating cash flow
Slide 5: The group today - better positioned than ever
The group today - better positioned than ever • Range of service lines: • Multiple sources of growth potential • Ability to grow across the economic cycle • Strong financial platform • Counter-cyclical focus retained • Service lines well positioned: • Strong operating margins • Highly cash generativ
Slide 6: Financial review
Financial review O Begbies Traynor Group
Slide 7: Financial highlights
Financial highlights £m 2019 2018 Revenue 60.1 52.4 Operating profit (before amortisation and transaction costs) 7.6 6.1 Margin 12.6% 11.6% Adjusted profit before tax 7.1 5.6 Adjusted basic EPS 4.9p 4.0p Dividend per share 2.6p 2.4p Net debt 6.0 7.5 • Revenue increase of 15% in the year (9% organic
Slide 8: Segmental analysis
Segmental analysis £m 2019 2018 Revenue Business recovery and financial advisory 43.3 38.3 Property services 16.7 14.2 Total 60.1 52.4 Operating profit Business recovery and financial advisory 8.7 7.6 Margin 20.0% 19.8% Property services 3.8 3.1 Margin 22.5% 22.1% Segmental result 12.4 10.7 Margin 2
Slide 9: Business recovery and financial advisory
Business recovery and financial advisory • Revenue growth of 13%: • Organic growth initiatives • Increased market activity levels • Prior year acquisition of Springboard • Cost increase from organic investments, increased people costs and prior year acquisition 19 • Margins increased to 20.0% (2018:
Slide 10: Property services
Property services • Revenue growth of 18%: • Organic growth initiatives and distressed property sale completions • Current and prior year acquisitions • Cost increase from organic investments and acquired businesses • Margins increased to 22.5% (2018: 22.1%) 19 • Completed several long-running distr
Slide 11: Strong cash flow: funding investment and deleveraging
Strong cash flow: funding investment and deleveraging • Facilities: • £25m unsecured committed RCF and £5m uncommitted acquisition facility • Agreed extension to facilities in the year – now committed to 2023 • Strong financial position with leverage improved to 0.7x (2018: 1.1x) 10
Slide 12: Net assets
Net assets £m 30 April 2018 59.1 Post-tax adjusted earnings 5.5 Dividends (2.6) 2.9 Issue of new shares – principally re acquisitions 2.2 Adoption of IFRS 9 and IFRS 15 (1.4) Post-tax impact of acquisition-related transaction and amortisation costs (3.1) 30 April 2019 59.7 • IFRS 9 ‘Financial instru
Slide 13: Acquisitions
Acquisitions • Property services Croft – 31 January 2019 • Initial consideration of £1.5m (£1.125m cash and £0.375m shares) with estimated contingent consideration of £1.2m, maximum £2.5m • Pre acquisition trading: revenue £1.8m and pre-tax profit £0.7m Barker Storey Matthews – 5 April 2019 • In
Slide 14: FY20 guidance
FY20 guidance • Good start to new financial year • Business recovery and advisory • Return on FY19 investments with enhanced margins as a result • Potential further upside from continuing market growth • Property • Benefit from FY19 acquisitions • Anticipate organic revenue growth will mitigate the
Slide 15: Strategic overview
Strategic overview O Begbies Traynor Group 14
Slide 16: Our vision
Our vision To be leaders in our chosen professional services giving outstanding advice to our clients on establishing, protecting, enhancing and realising the value of their assets and businesses throughout the economic cycle 15
Slide 17: Strategy
Strategy • Be a trusted advisor to our clients, delivering innovative and entrepreneurial advice and solutions • Increase the scale and quality of our businesses through both organic growth and acquisitions • Deliver sustainable profit growth, enabling increased shareholder value • Maintain strong f
Slide 18: Organic growth initiatives
Organic growth initiatives Business recovery and advisory • Recruitment of 10 partners and directors over last two years - joining from national firms and local boutiques • Promoted seven existing fee earners to partner/director grade • Increased focus on internet and direct marketing • Market share
Slide 19: Recent acquisitions
Recent acquisitions Property • BSM – acquired Apr 19 – revenue £3.1m, profit £0.6m, staff 38 • Develops geographical coverage - offices in Cambridge, Huntingdon, Peterborough and Bury St Edmunds • Service lines consistent with Eddisons: • commercial agency, property management, building consultancy,
Slide 20: Strong track record of integrating acquisitions
Strong track record of integrating acquisitions 2019 2019 2019 BSM KRE and Dunion Croft (Chartered surveyors) (Insolvency) (Transport planning) Revenue: £3.1m Revenue: £0.7m Revenue: £1.8m Profit: £0.6m Profit: £0.2m Profit: £0.7m 2018 2018 2016 Springboard CJM Pugh (Corporate finance) (Industrial p
Slide 21: Outlook
Outlook O Begbies Traynor Group 20
Slide 22: Outlook
Outlook • Group is better positioned than ever • Multiple sources of potential growth • Good pipeline of organic and acquisition opportunities • Strong financial platform • Well placed to continue track record of growth with balance of: • Counter-cyclical activities • Breadth of services • Entered n
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: Insolvency market
Insolvency market Competitors Market Number of corporate appointments 2018 Begbies Traynor 1,259 FRP 506 Leonard Curtis 472 Quantuma 344 TOTAL 16,090 Market share 8% Source: London, Edinburgh and Belfast Gazettes, Accountant in Bankruptcy, • Insolvencies last peaked at 24,000 in 2009 Companies House
Slide 26: Financial advisory
Financial advisory • Services: • Clients: • Corporate finance - Buy and sell side private company • Businesses transactions • Legal and professional community • Forensic accounting and investigations - fraud and financial • Banks and financial institutions crime investigations, expert witness for di
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 develo
Slide 28: Ownership structure
Ownership structure The group has 114.4m shares in issue. The ownership profile is: Name % holding Ric Traynor 23.8% Other management 6.6% Major institutions: • Hof Hoorneman Bankiers 10.3% • Fidelity International 7.9% • OVMK Vermogensbeheer 6.1% • Close Brothers 5.2% • Allianz Global Investors 3.6
Slide 29: FY20 financial guidance
FY20 financial guidance • Confident of delivering current market expectations for the full year • Business recovery and advisory • Revenue growth target of c5% from investments made in FY19 with margin enhancement to c22% • Potential further upside from continuing market growth • Property – full yea
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.