Begbies Traynor increases dividend after 283% profit increase

Begbies Traynor Group on Tuesday raised its annual dividend for the first time since 2011 as it reported a 283% rise in profit before tax up to £2.3m for the year ended 30 April.

The AIM traded corporate rescue and recovery practice proposed a 9% increase in its total dividend for the year of 2.4p per share, after a year that saw a 5.4% rise in revenues to £52.4m, compared to the previous 12-month stretch.

Further to the dividend increase, the firm’s net debt is at its lowest point since 2007, sitting at £7.5m compared to £10.3m the previous year.

Begbies' business recovery and financial advisory activities contributed £2.1m to the aforementioned 5.4% uptick in revenues, while acquisitions contributed £0.6m.

As such, the group said that it is sufficiently cash generative that, as well as being able to reduce its net debt position, it has been able to fund £1.9m of acquisition and deferred consideration payments.

Ric Traynor, executive chairman of Begbies, said: "It is pleasing to report a further year of progress in developing the group, during which we have continued to deliver earnings growth, reflecting the benefit of the strategic investments we have made in recent years."

Begbies has developed advisory services through its acquisition of Springboard Corporate Finance and has expanded its property services through its acquisition of CJM Asset Management.

The company reported that both new businesses had performed in line with expectations in the post-acquisition period and the integration with it advisory team is progressing well.

"We anticipate continuing our track record of earnings growth in the new financial year, with the benefit of a full year contribution from our recent acquisitions together with growth from our ongoing investments. Overall, we remain in a strong position to invest in further opportunities given our financial resources," said Traynor.

Traynor added that further investment of the company’s resources was in line with the board’s strategy to grow the business both organically and through selective acquisitions.

As of 0926 BST, Begbies Traynor Group’s shares were up 0.97% at 70.08p.