The AGM statement confirms that the current year has started well and expresses confidence regarding delivery of market forecasts. Implementation of a consistent strategy over the last decade has tripled the size of business revenues and achieved a six-fold increase in adjusted PBT, contributions coming from both acquisitions and organic investment.
Parallel growth in underlying cash flows has enabled the group to repay debt drawn to fund investment and simultaneously built earnings and enabled progressive dividends. Across the period BEG has significantly diversified its revenue sources; c 60% is currently derived from insolvency activities.
A good start to the new financial year has seen ‘encouraging activity levels’, with investment in organic development reflected in recruitment of additional senior fee earners across the group. Results for Q1 24 were in line with its expectations and included double digit growth in both revenue and adjusted profits versus the Q1 23 comparative.
The group’s underlying markets are fully conducive to delivering FY25 forecasts which are unchanged. UK insolvency market volumes remain a key driver and continue at elevated levels. BEG has built its team capacity and geographical profile over the last few years to accommodate this.
Relative to the probability that BEG will continue to build upon a decade of consistent growth recent share price performance looks anomalous. As the group has consistently beaten our expectations since our initial appraisal, we maintain our fair value at 175p / share.
