Companies: BEG   

Recommended by Growth Company Investor at 69.5p last March, shares in insolvency and corporate rescue outfit Begbies Traynor have almost doubled, valuing the venture at almost £100m.

Chairman Ric Traynor has announced strong interims to the end of October, with pre-tax profits powering up 90% to over £1m, on turnover lifted 29% to £14.2m. Underlying organic growth was 8%, adjusted earnings grew to 2.5p (1.9p) and investors are to be treated to a 0.5p dividend.

The top line rise, in the seasonally weaker first half, was scored against a background of static market volumes in Begbies’ core corporate market, where it focuses on ‘small-to-mid’ sized cases. Traynor continues to develop Begbies’ core UK corporate recovery business, as well as expand into related professional service areas.

During the half, Begbies completed two major acquisitions, buying MCF in the field of corporate finance, as well as Southend-based insolvency practice TGF. Together, these businesses brought in £1.8m of turnover, and contributed £600,000 to first half operating profit. Then in November, Begbies made a move into the growing and highly topical ‘retail’ personal insolvency market with the acquisition of W3 Debt Solutions.

Encouragingly, Traynor claims there are early signs the business insolvency market will enjoy cyclical upturn in 2006, and he is also eyeing up moves into other service areas, hinting at acquisitions in the areas of corporate finance and forensic business. For the year to April, analysts are going for profits of £6.6m and earnings of 6.24p, placing the shares on a forward multiple of 21 times. Prudently book some profits, but stay exposed for further growth.