Disposal of Tax Division

RNS Number : 8462S

Begbies Traynor Group PLC

28 November 2011

 



28 November 2011

Begbies Traynor Group plc

Disposal of Tax Division

Notification of results

Begbies Traynor Group plc (the "Group"), the specialist professional services consultancy, today announces it has completed the sale of the Group's tax business to Smith & Williamson Holdings Limited for an initial consideration of £2.9 million payable in cash on completion, subject to routine completion account adjustments around normalised levels of working capital.

In addition, the Group will be entitled to a deferred consideration payment calculated as 50% of income greater than £5.8 million (calculated in relation to invoices raised by the disposed business) for the twelve month period ending 30 April 2012, together with a further payment dependent on the success of certain specified client engagements in the subsequent period to 30 April 2013. Otherwise, the tax business is being sold on a cash-free / debt-free basis.

The Group's tax division, which comprises its specialist tax and tax investigations consultancy, includes 56 employees and partners, located principally in Birmingham, London and Manchester.  For the financial year ended 30 April 2011, it reported revenue of £7.0m and segmental EBITA (pre-exceptional and acquisition-related costs) of £0.1m.  Its carrying value in the Group's accounts at 30 April 2011 was £7.0m.  The financial impact on the Group of balance sheet write downs (principally non-cash items), property costs and professional fees associated with the sale will be finalised and reported in the Group's half year results announcement on 15 December 2011.

The net sale proceeds, once determined, will be applied to reduce the Group's net debt. The Group continues to make progress with the divestment of its Red Flag business and will make a further announcement as and when appropriate. The Board signalled its intention to divest the two divisions as a result of a strategic review announced in July 2011.

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

"We are pleased to have secured the sale of this non-core business in line with our strategy. We believe it will be better taken forward under Smith & Williamson's ownership, given their strength within the tax market.  

"Today's sale will enable the Group to focus on its two core businesses (insolvency and global risk partners) to enhance their market positions and take advantage of growth opportunities in their respective markets."

Ends

Enquiries please contact:

Begbies Traynor Group PLC                                                                0161 837 1700

Ric Traynor - Executive Chairman

Nick Taylor - Group Finance Director

Collins Stewart Europe Limited                                                           020 7523 8350

(Nominated Adviser and Joint Broker)

Mark Dickenson / Bruce Garrow

Shore Capital                                                                                         020 7408 4090

(Joint Broker)

Pascal Keane

MHP Communications                                                                          020 3128 8100

Reg Hoare / Katie Hunt / Giles Robinson

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

 

END

 

 

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