7:59 cut – BEG

Begbies Traynor (BEG) – FY 2019 Update

Begbies Traynor is a insolvency and business recovery company that has more recently diversified into property services. Their Q3 last trading update issued 5th March was in line, but they were careful to point out that full year results would be dependent on a number of (lumpy-sounding) instructions completing in Q4. Following this, broker estimates were slightly increased and the share price entered a short uptrend for a few weeks before falling back to its 12 month lows of 60p, some 20% of the year high of 75p.

Today they report that Q4 went well and that the full year was “comfortably ahead” of expectations with a strong order book and further growth expected.

They carry some debt and today announce this was at £6m at the end of the period due to good cash collection. Looking at previous figures there seems to be a consistent seasonal element to cash and so the comparitor should be £7.5m 1 year ago (and £10.3m the year before that)

I don’t currently hold, but with no remaining trading concerns, a modest PE, high dividend yield, PEG well under 1, reducing debt and a proven business model, I will looking to buy this morning.

One thought on “7:59 cut – BEG

  1. I’m not a close follower but was peripherally involved with the insolvency sector professionally for a while. My take on the fundamentals is that begbies gets the largest number of small cases but the big 4 pick up the lucrative big cases where all the real money is made. So unless they come with some unmatched process efficiency begbies will always be a margin player.

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