Thank you everybody for joining us. We're looking forward to presenting our half year results. I will lead off with some background as to the business, in case there's anybody who's joining us who doesn't know what we do, and then we'll go into the numbers. Moving through the disclaimer very quickly. So we're a leading professional services consultancy with a differentiated service offering. 60% of what we do is insolvency work, and over 90% of that insolvency work is corporate, the balance being some personal insolvency. We have a market leading position from a national office network and selective offshore locations, so our business model is to be very much in the heart of the local business community. We provide advice and assistance to SMEs and mid-market corporates.
The other 40% of our business is advisory and transactional services, the bulk of which are carried out under our Eddisons Commercial Chartered Surveyors banner, and that covers activities such as financial advisory, transactional support, funding, valuations, projects and development support, and asset management and insurance. But overall, 80% of revenue from insolvency and defensive activities, coming from a common network of clients and professionals with centralized support services supporting their activities. So that is a summary of who we are and what we do. Moving on to the next slide, which highlights the half year. Strong first half performance and confidence in full year outlook. We're pleased to report double-digit revenue and profit growth. The insolvency and financial advisory business performed well, as did the property advisory and transactional services.
We've continued to provide a solid platform for growth, both organic and acquired, and the acquisitions we made during the period, which we'll come on to, are trading well and in line with expectations. In terms of dividend, we've extended the dividend increase for the sixth year, while still allowing for sufficient retained funds to fund the bolt-on acquisitions that we've been making on a regular basis. In terms of the detail of the financials, I'll pass over to Nick now.
Great, thank you, Ric. Good morning, everyone. I'll start with the financial highlights, which is slide five, where we've seen double-digit revenue and operating profit growth. That's 13% top line growth, 8% of which was organic. We've maintained our operating margins at just over 16%, and that's with improvements in insolvency and property, offset by financial advisory. We'll look at the movements in operating profits on a later slide. Adjusted pre-tax profits up by 10% to GBP 9.9 million, having absorbed increased finance costs in the period, and EPS growth at 5% reflects the increased UK corporation tax rates, which have been effective for the whole of this six-month period. We closed the six months with net cash of GBP 1.1 million.
That's having made GBP 4 million of acquisition payments in the period, and that compares to a net debt of GBP 2.4 million at the same point in the last financial year. So on this slide, just looking at the adjusting items that we have in our results, which are all acquisition related. The first block, which we badge as transaction costs, is all resulting from consideration for acquisitions. It's not an operating item. It's there as an adjustment because IFRS 3 requires us to charge to profit all consideration where vendors have obligations to remain with the business, and so the consideration that we're paying for acquiring the business gets charged to profit rather than taken to the balance sheet as consideration.
And what that then means is that we've effectively acquired the assets for nil consideration, so we end up with an exceptional gain going into profit. That gain in the six months was GBP 0.7 million, and the comparative period was significantly more material at GBP 4.9 million. So both of those adjustments come out, and that's transaction costs of GBP 3.9 million and GBP 0.8 million for the comparative. And the other adjusting item that we have are the non-cash acquired intangibles amortization, and these are intangible assets that we only recognize on the balance sheet through acquisition accounting, which for us is typically brands, customer relationships, order books, websites, and that's a GBP 3 million add back in the period, of GBP 3.2 million in the comparative. So total adjusting items are GBP 6.9 million and GBP 4 million, all resulting from acquisitions.
If we return to operating performance, where we've got a balanced mix of services across the group, which has driven our double-digit revenue growth. Just looking at some of those movements in a little bit more detail. Within insolvency, we've had higher activity and an increase in our team size in the period, which drove the increase in revenue, profit and margin. Within property services, the breadth of expertise and services that we provide enabled us to grow the business and increase its margins. Just to give a feel for the various moving parts, within valuations, revaluations and loan security reviews have picked up over the course of the last six months, and that's replaced a drop in new loan valuations. And similarly, in asset sales, we've been selling more assets through auction.
That's property and plant machinery, and that's offset a reduction in agency sales of property and small businesses. So that's the resilience and that breadth of expertise of being able to provide our services across the cycle. Within building consultants, we've continued to see increase in demand and grow that team, where we're advising clients on their property estate. We've had the benefits of both current year and prior year transactions come through with an increase in profits. And going the other way, within financial advisory, we had a particularly strong comparative period, and that was from a number of contingent fees falling in right at the very start of the prior year, so we knew there would be a drop-off from that. But we've also seen a tougher market over the course of the last six months.
In the face of that, our performance has been resilient, and we've had refinancing and restructuring advice, which has helped to mitigate the reduction in those corporate transactions. And that's both M&A, which is widely reported. I'm sure you're all aware of the significant reduction in M&A that's been over the course of this calendar year, but also other capital transactions where we're providing funding support for clients. And our shared and central costs have increased year- on- year, and that's the ongoing investment in our support teams, notably in our IT and HR capability. And Ric will give a view of some of the areas of focus that the teams are working on at the moment. Overall, the net impact of those movements is a growth in operating profit of GBP 1.2 million. The next slide pulls that together and shows the results by segment.
Really highlights the very strong performance within property advisory and transactional services, with operating profit growth of just over 30%. You can see the shared and central costs increasing by 10%, but reducing slightly as a percentage of revenue, with margins maintained overall at 16.2%. Into cash flow, we've continued to have a strong cash generation. Our free cash flow increased in the period, which has funded the ongoing investments in the group. That free cash flow is after a working capital absorption, which is pretty much in line with the same point last year, and that's with lockup maintained from that year-end position. That working capital absorption coming through on the organic insolvency growth. Acquisition payments in the period of GBP 4 million.
That was GBP 0.8 million for in-year deals, earn-outs of GBP 3.1 million, and we closed the period at the end of October with a net cash position of GBP 1.1 million. That's compared to net debt of GBP 2.4 million at the comparative period and a cash position at the start of the year. Got plenty of headroom within our facilities. They run through till August 2025, which is a GBP 25 million committed RCF, with a further GBP 5 million accordion growth facility, and that provides us with plenty of firepower for any further M&A. And looking ahead to the full year, we are confident of delivering market expectations for the year to April 2024.
Within insolvency, we anticipate activity levels will continue to increase, that higher interest rates and inflation environment is continuing to cause corporate financial stress, and we expect that growth will come through the H2 of the year we're in, and thereafter. Within financial advisory, we anticipate a broadly consistent H2 performance. Within property services, we anticipate the H2 will be ahead of the comparative period, but will be lower than the H1 due to the seasonality of project work, but we expect to report another year of strong growth. Overall, we're confident of continuing to build on our strong track record, both in the current year and beyond, and we will give an update on Q3 trading in late February next year. All in all, it's another good set of numbers.
Our outlook looks good for the H2 and, now I'll hand back to Ric.
Thank you, Nick. Moving on to slide 12, we have a look at the UK insolvency market and our experience over the last six months. Insolvencies are now higher than the pre-pandemic levels, largely from liquidations, which are the smaller cases, but we're starting to see the ripple effect up the size chain, and administrations are now approaching pre-pandemic levels. Our experience has reflected that in terms of the number of administrations we've been active on increasing. Just a look at our increase in insolvency activity since 2019. We've doubled our insolvency revenues, as you can see from the graph on the right, which compares with a 37% increase in insolvencies overall. Our experience is that we've been pushing forward ahead of the market, which is due to a mixture of organic growth and some acquisitions that we've made.
We expect higher interest rates and inflation to continue to bite, so into next year, we expect more activity, and particularly in the mid-market, where we expect to see more larger companies face those headwinds which mean that they need formal insolvency advice. In terms of the team, we've increased the size by 12% since this time last year, 6% of which is since the end of the financial year in April. Now, that is mainly at the junior level, although we have six new partners, they're the appointment-taking insolvency practitioners. Mainly, the recruitment has been of junior members into their teams. That builds up the pyramid below those senior people and allows them to take on more work and produce more fees.
So in terms of turnover per insolvency practitioner, we're now at a run rate of about GBP 900,000, which is up from GBP 800,000 when we last reported, and we're hoping, moving into next year, that GBP 1 million+ is achievable, so long as those insolvency practitioners have the right support below them. We've seen an increase in revenue from larger appointments. As I mentioned, there are more administrations in the mix. At the moment, they tend to be the smaller administrations because of that ripple effect up the size chain. But certainly, if you look at the graph, bottom right, you will see that the GBP 10,000-GBP 50,000 sector, which is bigger liquidations and small administrations, has increased, and the above GBP 50,000, which is almost exclusively administrations, that has increased for us as well.
Anecdotally, in terms of some of the things we've been doing, you may recall that we reported on the Bounce Back Loan project we had with one of the major clearers last time, where we took on 100 speculative cases where it looked like Bounce Back loans had come into the company and gone straight out again, rather than being used for their operations. Well, we've now had success on 27 of those cases, winning cash back and getting returned to the bank, and we're actively working on more of them, so we suspect the success rate will be well above the 27% we currently have, and we're anticipating that the bank will give us a new tranche of work in the very near future. We're also seeing a lot more in terms of fraud and investigation cases, which is not a surprise.
When things start to get tough, the fraud starts to come out. Now, the good thing about this is that it also uses the forensic skills we have in-house, as well as our insolvency practitioners' expertise on the insolvency elements of these cases. But in terms of insolvency overall, we expect further progress in the H2 and into the next financial year. Moving on to our property services division, which is the hidden gem within Begbies Traynor. Our strategy is to enhance and broaden our service offering and geographical coverage. This business has now built up to a run rate of about GBP 40 million from the low teens when we took it on board. It's delivering earnings enhancement from both organic growth and acquisitions. We've seen a good turnover and profit growth in the half year.
In terms of those particular services that are doing well, valuations, auctions, consultancy, and insolvency services are all doing well and moving forward. Looking at some of the organic initiatives we've got across some of those service lines, investment in sustainability capability and building consultancy, we're seeing an increased demand from private and public sector clients for services to upgrade buildings to meet environmental requirements, and that's the demand we expect to see for years to come. We've made recruitments in property auctions, seeing the team grow.
That's building on the recent acquisition we did in Sheffield, so we now have a very strong offering across the north of England, and we've been recruiting staff to support that, and a stronger demand for auction services in these difficult times when owners of properties, whether that's individuals or banks who've repossessed properties, are looking for a quick sale, and auction is the best way to get that decisive result in the short term. We've also strengthened our property insolvency position. Obviously, with increased activities from rising insolvencies, there's more work coming into Eddisons, both from our own insolvency business and from our competitors, both on the property and plant machinery work. We've made two acquisitions since the beginning of the financial year. The first one, Banks Long & Co, based in Lincoln, is a multidisciplinary chartered surveyors, and that was sourced from our internal search activities.
It covers the normal things you'd expect from a multidisciplinary firm, commercial property agency, property management, building consultancy, and valuation services. It's got a strong offering across Lincolnshire and Humberside, and it strengthens Eddisons' team across Eastern England and South Yorkshire. The second acquisition falls just outside the period we're reporting on, being made in November of this year. Andrew Forbes, which is a valuation specialist, introduced to us by a broker, as we're known to be buyers of these businesses. Some of these opportunities are now coming to us, as well as us going out and seeking them. It extends Eddisons' regional coverage into the southwest and increases the bank panel work in the region, because we are on the banks' panels. Andrew Forbes will have been on some of them, but not all of them, so it immediately increases the access to work for them.
It means that we've got a national valuations team of over 100 colleagues, but also it provides a footprint for us now in the southwest to build Eddisons' other services onto that valuation platform. There are excellent opportunities for further organic and acquired growth within this business, in what is a large and fragmented marketplace. Moving on to what we've been doing internally. We've been investing in our people and processes to support growth. We're servicing a larger business and looking forward to meeting future needs of that business. So in terms of people, we've recruited an experienced HR people team, who are focused on retention and recruitment, training and career progression, and staff wellness and benefits. An example of the latter is the Wellbeing Awareness Program launched recently, which is a 24/7 health and wellbeing support service for all colleagues, provided by Smart Health.
So that's access to all of our colleagues and their families to immediate medical advice when they need it. In terms of processes, we've further invested in our in-house IT and data management team to increase efficiency and security of internal and client-facing systems. We've got an ongoing project to move to cloud-based solutions, which give us the benefit of flexibility, security, and cost. And overall, these people and process activities enhance the working environment for our people and further improve our services to clients. Moving to the summary. On this slide, hopefully it speaks for itself. Two things to pull out there. The graph in the middle of the lower level, which is adjusted Diluted Earnings Per Share, where we've seen a 21% cumulative average growth rate over the last five years. That's the thing, ultimately, that's important for shareholders and what we're concentrating on.
In terms of looking forward, our medium-term revenue target is GBP 200 million, which we will seek to achieve over the next number of years based on the existing strategy of organic and acquired growth, while maintaining or improving margins. Moving on to the summary, we have confidence in the full-year outlook, a strong H1 performance delivering double-digit growth. We continue to execute our proven growth strategy. Since 2019, we have doubled revenue and tripled profits. Growth from both divisions in the half year, both organically and through acquisitions. We're in a strong position to continue investing in the business, to build scale and range of complementary services, and our ambition is to maintain our growth track record with a medium-term revenue target of GBP 200 million, while maintaining or improving margins.
We're continuing to build upon our strong track record in the current year and beyond. Well, thank you for listening, and are there any questions?
We've got a question from Samuel Dindol from Stifel.
Morning, guys. Congratulations on the good results. A couple of questions from me, please. Firstly, on insolvency in terms of the junior hiring, is do you think I have more to go there, or do you think you're now sort of happy with the team you've got? And then secondly, on the GBP 200 million target, do you think the progress from now till then will be quite similar in terms of the balance between M&A and organic growth as it has been over the past five years? Many thanks.
In terms of the first question, I think that we will increase the size of the team. We do have spare capacity in the team, and that's deliberate because we anticipate that there will be more activity, and sometimes that activity can come in waves. So you need to make sure that you're resourced for that wave when it comes. In terms of our strategy moving forward, we would expect to see the same sort of mix between organic and acquired growth within our existing service lines.
If we take on a new service line, that may be a game changer, depending on what it is, but at the moment, we know we can achieve, or feel confident we can achieve, this target of 200 while maintaining or improving margins based on the services that we've currently got, and that sort of mix of organic and acquired growth.
Question from Andy Edmond at Equity Development.
The cost increase, some of it, you know, on a comparative basis, can be obviously attributed to the corporate tax rate. But looking forward, how much do you think is entrenched, in terms of slightly rising costs of people, et cetera, looking at the inflationary environment we're seeing there, and how much do you think this might well be as a peak in medium-term growth in costs?
Well, I think in, in terms of cost, Andy, there's always gonna be annual salary reviews which have an inflationary impact. Our cost base is about 75% people, so that, that will clearly have an impact going forwards. All the evidence is that salary wage rates have possibly peaked and won't be at the same level again moving forwards, but we, we evaluate that every summer, so we'll take stock of where we are at that point. But, you know, we would expect to be having some kind of pay review and, and inflation go through to next year. We had it last year, and we've recovered that through improvements in productivity and, and fee rates, and, you know, we, we'd anticipate being able to do that again moving forwards.
And in terms of financial advisory, as you say, obviously lots of reasons why it's been a slow market for particularly SME M&A. Any signs as we look at the market now, yeah, it may be too soon to react, but interest rate expectations, at least for the moment, see a lot of people hoping that the cost of debt has peaked on the short term. Any sign of activity? We're seeing some bigger deals, private equity, non-U.K. buyers of businesses, but is anything permeating down to the activities that you're in at the moment?
I think the n ot to benefit the H2, probably, but the pipeline of instructions that the team are pitching on and being appointed on now suggests that the next financial year should hopefully see some recovery in those transactions. I think it's, as you say, Andy, that confidence that interest rates have probably peaked, but the level that they're at at the moment is giving people that desire to get moving again with transactions, but, you know, probably not enough to make a material impact for us in our H2.
A question from Gavin Laidlaw, from Stockwatch. I know you've commented on one part of the business, but he's asking: How bad is the economy in terms of the pipeline of business?
In terms of the activities where we're giving advice on an informal basis, so often, unless, and again, it's often the case that we're instructed, and immediately it's an insolvency, but in many cases, we're instructed at an earlier stage, where a business is starting to struggle and needs some general advice. We are certainly seeing more of those calls and more activities. So we would say that that pipeline of potential insolvencies is still very strong, and we'd be very surprised if it's gonna be anything other than stronger in the next 12 months, and particularly more of that mid-market in the mix, where those businesses which have had sufficient opportunity to look at alternatives, but some haven't been able to actually turn themselves around.
Those businesses will finally come in and need some form of insolvency. So it's a strong pipeline at the moment, and we anticipate the next 12 months will be a strong 12 months for us in terms of actual appointments made.
We've got a question from Portia Patel at Canaccord. Regarding new hires at the more junior level you mentioned in insolvency, are these grads, or are you hiring from competitors? And do you anticipate more hiring in half two and next year to continue to build capacity ahead of anticipated growing work levels?
Yes. Well, hi, Portia. Those recruits are a mixture of from competitors, but mainly focused on graduates and apprentices. So we're bringing people in at a junior level, and training them. And I'm pleased to say that immediately there are things that they can do which are productive and chargeable to clients, so we're getting use out of them straight away. But they are the experienced insolvency practitioners of the future that we're growing in-house, which is something that we've always done. And in terms of do we anticipate that will increase? I think it's highly likely that when we next report at the year-end, those numbers will have gone up again.
And we've got a question from Frederick Johansson from HC Capital. What's the level of unearned income as a percentage of accounts receivable and revenue?
This is the insolvency element, Frederick. So it's about 80%, typically, of the overall receivable balance will be the work that we've done on an insolvency case, where we've not yet reached the stage where we've got cash in the case that we can bill against. But there's a sort of a lockup day position that's remained pretty flat now for a number of years. So the growth that we've seen over the course of the six months is purely that six-month lockup coming through as a working capital drag on the organic insolvency revenue growth.
Great. Thank you very much indeed. That's the end of questions. Ric, do you have any closing remarks?
I'd just like to thank everybody for joining us, and I hope everybody has a wonderful Christmas and New Year, and we look forward to reporting on our full year next July.