27 June 2022

Begbies Traynor Group plc

Acquisition

Further expansion of Eddisons' regional footprint and offering

Begbies Traynor Group plc (the "group"), the business recovery, financial advisory and property services consultancy, today announces that it has completed the acquisition of Budworth Hardcastle Ltd.

Budworth Hardcastle is a firm of chartered surveyors employing 18 staff in offices in Northampton, Kettering and Peterborough. The business will integrate with Eddisons, the group's property division, which has existing regional offices in Bury St Edmunds, Huntingdon, Northampton and Peterborough.

The Budworth Hardcastle team provide valuation, commercial property agency and building consultancy services to a wide range of regional clients, which aligns with the group's current service offering and strengthens our regional presence.

In its financial year ended 31 August 2021, Budworth Hardcastle generated revenue of £1.8m (unaudited) and normalised pre-tax profits of £0.4m (when reported on the same basis as the group). Trading has been maintained at these levels in the current financial year to date. It had net assets of £0.4m (including £0.3 cash) as at 31 August 2021.

Reasons for and benefits of the acquisition

The group's strategy is to increase the scale and quality of its businesses both organically and through value-accretive acquisitions, thereby delivering strong, sustainable financial performance.

Our strategy in property services is to enhance and broaden our service offerings and geographical coverage. Since the creation of the division through the acquisition of Eddisons in December 2014, the group has built a strong track record of acquisitions that have met these criteria. This strategy has increased the scale of the division from annual revenue of c£13m at inception to a current run rate of c£30m, together with strong and growing profitability.

The acquisition is in line with our strategy, as the Budworth Hardcastle team will strengthen Eddisons' existing offering and footprint in Eastern England, and follows the recent acquisitions of Daniells Harrison (January 2022) and Fernie Greaves (October 2021) which augmented our south coast and Yorkshire presences.

Principal terms of the acquisition

The acquisition consideration is structured as follows, based on current levels of financial performance and on a cash free, debt free basis:

·    Initial consideration of £0.9m, payable £0.6m in cash and through the issue of 206,937 new ordinary shares;

·    Contingent cash consideration of up to £0.9m subject to maintaining financial performance in the three year period post completion.

In addition, the acquisition includes a maximum cash earn out of £0.6m subject to meeting growth targets over the five year period post completion.

This gives a maximum consideration of £2.4m (on a cash free debt free basis).

The cash consideration will be met from the group's existing financial resources, with significant headroom available for further acquisitions and investment.

Application has been made to the London Stock Exchange for the 206,937 new ordinary shares to be admitted to trading on AIM. It is expected that admission will become effective at 8.00 a.m. on 30 June 2022 following which the total number of shares in issue and total voting rights will be 153,742,455. The group does not hold any shares in treasury and, therefore, the above figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the company. 

Anthony Spencer, Director at Eddisons, commented:

"I am very pleased to welcome the Budworth Hardcastle team to Eddisons, which extends our footprint in Eastern England. They are a highly experienced team with a proven track record in delivering high quality professional advice. We continue to seek further opportunities for expansion across the UK."

Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:

"The acquisition of Budworth Hardcastle is in line with our strategy to develop our property advisory and transactional services division, by increasing both its scale and market position, as well as the scope of its service offering and geographical coverage. Budworth Hardcastle has excellent relationships with a broad range of clients which have been developed over many years and we are very much looking forward to working with them."

Enquiries please contact:

Begbies Traynor Group plc                                                            0161 837 1700

Ric Traynor - Executive Chairman

Nick Taylor - Group Finance Director

Canaccord Genuity Limited                                                            020 7523 8350

(Nominated Adviser and Joint Broker)

Adam James / Patrick Dolaghan

Shore Capital                                                                                    020 7408 4090

(Joint Broker)

Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas

MHP Communications                                                                     020 3128 8567

Reg Hoare / Katie Hunt / Pauline Guenot                                           begbies@mhpc.com 

Information on Begbies Traynor Group can be accessed via the Group's website at
www.begbies-traynorgroup.com/investor-relations