City round-up: Begbies Traynor; Frenkel Topping; James Halstead
Manchester-based insolvency experts, Begbies Traynor Group, reported a strong first half, today, with expectations for an even better second half.
In a trading update for the six month period ended October 31, the group revealed revenues increased to around £52m, against £37.5m this time a year ago, with adjusted profit before tax growing to circa £8m, up from £5m in 2020: £5.0m, principally reflecting the benefit of acquisitions completed since January 2021.
The group has maintained its strong financial position with net cash of £1.2m at October 31, 2021 (30 April 2021: £3.0m, 31 October 2020: £0.7m) and significant levels of headroom within its committed bank facilities. Acquisition and deferred consideration payments of around £3m were made in the period.
As previously guided, Begbies expects its results will have a second half weighting as it anticipate an increase in insolvency activity over the remainder of its financial year – April 30, 2022. Overall, the group remains confident of delivering market expectations – adjusted pre-tax profit of £17.0m-£18.5m – for the full year, which will represent a year of significant growth.
The update said the insolvency market has been suppressed since March 2020 due to Government support measures during the pandemic. However, since May 2021, the Insolvency Service has reported month on month increases in insolvency appointments nationally as these support measures have been removed.
The increases to date have predominantly been in liquidations – which typically represent insolvencies of smaller companies – where the volume of appointments has now returned to pre-pandemic levels.
Begbies has increased its share of this market segment in the year by volume. Although the number of administrations – which typically involve larger and more complex instructions – has increased in recent months, they are currently significantly below pre-pandemic levels.
The group’s business recovery and financial advisory division performed well in the period. The prior year acquisitions have performed in line with expectations and have been integrated as planned. Organic activity levels have reflected the market dynamics in the six months.
The corporate finance team had a successful six months of deal completions and has a strong pipeline of transactions for the second half of the group’s financial year. The MAF Finance Group acquisition, completed in May 2021, has delivered results in line with expectations, with synergy and cross selling opportunities being identified as the business has been integrated into the group.
The property advisory and transactional services division performed well and achieved year on year growth in revenue and profit, inclusive of acquisitions, from a normalised trading performance compared with the lockdown impacted comparative period.
Begbies said it will report its half year results for the six months ended October 31, 2021, on Tuesday, December 14.
Executive chairman, Ric Traynor, said: “I am pleased to report a strong financial performance in the first six months of our financial year, which is testament to the benefit and integration of our recent acquisitions.
“We remain confident of delivering market expectations for the full year, which will represent a year of significant growth and ensures we are well placed to continue to invest in our successful growth strategy.”
::
Richard Fraser
AIM-listed Frenkel Topping Group has announced a joint venture between its IFA arm and law firm Ralli, taking its joint ventures to six in the personal injury and clinical negligence space.
The Salford-based financial services group said its independent financial advice division, Frenkel Topping Limited, and Ralli will provide services jointly under the trading name Ralli Financial Services Ltd.
Ralli managing director, Martin Coyne, lead partner Adrian Anderson and partner, Stephen Fox, will act as directors of RFS alongside Frenkel Topping’s group CEO, Richard Fraser, chief operations officer Mark Holt and chief financial officer Elaine Cullen-Grant.
RFS combines the specialist skills of Frenkel Topping Limited with Ralli to deliver a seamless legal and financial advice journey to clients involved in litigation after severe injury, illness or clinical negligence. RFS is the latest in Frenkel Topping’s strategy to strengthen relationships with like minded firms in the personal injury and clinical negligence space. The group’s five other JVs have also added around £55m of assets under management to the company to date and it is confident this JV will add to this.
Through RFS, Frenkel Topping will become Ralli’s preferred partner for clients who require investment advice post-settlement and RFS will extend the law firm’s suite of services to meet the needs of the most complex client cases. Both these Manchester-headquartered firms deliver services nationally and this JV is expected to bring synergies and support future growth for both businesses.
Ralli is a specialist at supporting clients after personal injury, road traffic accidents, medical negligence, serious injury and military accidents.
Mark Holt, managing director of Frenkel Topping Limited, said: “I have known and worked with the team at Ralli for many years and have always been impressed by their professionalism and standard of client care. This alliance is a hugely positive development for both firms by aligning two great businesses, with one shared ethos and a mutual drive to put the client first.”
Richard Fraser said: “As part of our strategy to grow our core business, we are formalising our relationships with high calibre firms who share our client-first mentality. Joint ventures, like this one with Ralli, expand our network of new business referrers and demonstrate our commitment to innovate and enhance our services, ultimately supporting our objective to increase shareholder value.”
Martin Coyne said: “We have trusted Frenkel Topping for 30 years to deliver IFA services to our clients. This joint venture cements our shared commitment to our clients to provide a consistently exceptional service and allows us to offer our clients a broader suite of services delivered with care, compassion and integrity.”
::
Anthony Wild
Bury-based floorings group, James Halstead, is holding its 106th AGM this morning, and chairman, Anthony Wild, will deliver a statement which reveals that sales for the first four months of the current financial year are ahead of the previous financial period.
Mr Wild’s comments to shareholders reveal that, over the past year and in recent weeks the group’s supply chain has shown significant resilience and supply shortages have been well managed, though some cost increases have had to be absorbed in the short term as there is an inevitable delay in passing on increases to stockists and to the projects the company has quoted for: “Nevertheless, we have already passed on some increases,” he wil say.
Since the year end, June 30, Halstead has generally experienced less disruption to its manufacturing workforce, with consequent operational efficiencies, increased productivity and greater factory output. In addition, there is increasing evidence of a return to normal levels of repair and renewal in the leisure and hospitality sectors which, for the business, has suffered greatly over the past 18 months.
Mr Wild will say: “The situation continues to offer challenges and frustrations and it is still difficult to say that the adversities are behind us.”
However, he will say that, these short term external challenges facing the business have no effect on the ongoing execution of the group’s strategy and the growth of its businesses around the world.
The statement says: “Our stockists, sales representatives and many agents are taking increasing orders and we are shipping goods in a more positive environment than we have experienced for some time. Sales for the first four months of the new trading year are ahead of the comparative for last year.”
The meeting is expected to approve a record 11p final dividend, up from 10p previously.
