Profits and sales slip as Begbies Traynor reports £8.5m acquisition
Begbies Traynor strikes deal to acquire firm of chartered surveyors; first half profits and sales slip
BEGBIES TRAYNOR said Friday it is to acquire Eddisons, a national firm of chartered surveyors, in a deal worth up to £8.5m and reported a slip in first half profits and sales as it continues to suffer from ‘challenging’ trading conditions.
The specialist business recovery practice said the lowest level of national insolvency volumes since 2007 contributed to difficult conditions that resulted in a 32% fall in pre-tax profits to £1.5m and a 3% reduction in revenues to £20.8m in the six months to October.
Begbies said that corporate insolvencies for the period were down 16%, but that it had retained its market-leading position in terms of number of insolvency appointments and that results were in line with market expectations.
“We have mitigated the full impact of market conditions through acquisitions completed in the current and prior year and continued cost discipline, and we have retained our market-leading position in terms of number of insolvency appointments,” said Ric Traynor [pictured], executive chairman of Begbies.
Net debt for the period fell from £17.8m to £16.2m, while operating costs remained broadly static at £18.3m and the group headcount fell from 438 to 431.
Traynor said he expects some improvement in trading during the second half of the year and that the last four months of the financial year will benefit from post-acquisition trading profits from the Eddisons deal.
Begbies has struck a deal to acquire Eddisons, which provides specialist services to banks, insolvency practitioners, and owners and occupiers of commercial property, for an initial consideration of £5.3m, with a further earn-out consideration of £3.5m payable in cash or shares. The deal was funded through a £5m placing of new shares.
“The acquisition will enable the group to utilise Eddisons’ expertise on its existing caseload rather than subcontractors, together with marketing the group’s enhanced competencies and service offerings to the combined client base, including banks and other financial institutions. The transaction is expected to be earnings enhancing in the current financial year,” Traynor said.
Eddisons was founded in 1844, has approximately 200 full time employees and has UK-wide coverage with offices in Leeds, London, Manchester, Birmingham, Bristol, Glasgow and Nottingham.