Welcome, everybody, to the Begbies Traynor H1 results. For those of you who don't know us, we're a leading U.K. advisory firm, and we help clients and stakeholders maximize the value of their assets over the economic cycle. We have two divisions and five pillars of activity: business recovery, advisory and corporate finance, valuations, asset sales, and property consultancy. In terms of our turnover recently, 55% is business recovery, 15% advisory and corporate finance, and the balance of 30% is made up of our valuations, asset sales, and property consultancy sectors. We have over 1,300 people with multiple offices across the U.K. and selected offshore locations, interacting with the local business community. I'm very pleased to report strong financial performance and high double-digit growth. Revenue increased 16% to GBP 76.3 million, a 20% increase in EBITDA to GBP 16.3 million.
Our interim dividend, an 8% increase to GBP 0.014, which is the eighth year of consecutive dividend increase, and it maintains our careful progressive dividend policy while allowing for acquisition funding needs. And at the period end, we had a very modest net debt of GBP 3.8 million compared with our GBP 35 million facility. Strong activity levels and positive momentum across the business. Insolvencies remain at elevated levels in the mid-20s. Commercial property transactions are in line with the prior year, and lending to UK real estate SMEs increased by 4%. These latter two points support our agency valuation and funding services businesses. We've seen double-digit organic growth across both divisions, increased insolvency activity coming from a bigger team and more valuable work, strong growth in financial advisory from restructuring, refinance, and funding opportunities, property auction volumes have increased.
Our platform has increased, as we'll come on to in due course, but also the desire for quick sales and certainty from those who are selling property. Building consultancies continue to expand with our sector expertise and geographical spread, and we've seen continuing growth and development of our team, a 7% growth in fee earners over the last 12 months, senior hires to grow advisory, that's both in the first half, those who have already joined us, and those who are scheduled to join us in the second half. Good progress on learning and development support, and continue to develop and deliver process improvement initiatives within the business, and we'll cover both of those in the presentation in due course. I'll now hand over to Nick for the financial review.
Great. Thank you, Ric. Good morning, everyone. As Ric said, in the six months, we've reported high double-digit revenue and profit growth at the top line, 16% revenue growth, of which 11% was organic. That flows through to an 18% increase in operating profit and a 16% increase in profit before tax. That growth has come across both of our divisions, starting with business recovery and insolvency, where insolvency revenue increased by 7%, that's all organic, to GBP 41.4 million from GBP 38.8 million in the prior year. And all of that growth this year has been driven by higher value cases, that's with fees of over GBP 50,000, and that now represents about 55% of our insolvency income, and that's from the 50% level where it's been tracking over the course of the last couple of years.
In addition to the growth in revenue, our pipeline has also increased, but these are insolvency cases where we are already appointed, but we've not yet taken the revenue yet, have not yet done the work. That's up to GBP 76.4 million from GBP 71.9 million at the start of the year, and that's a 9% increase from where we were 12 months ago. So over the course of last year, we've got an increase in pipeline, so more work to do as we look forward, while also reporting increased revenue. Within advisory, we've seen an increase of 39% in revenue, all of that's organic, to GBP 11.4 million from GBP 8.2 million. Breadth of activities we're doing here: restructuring, debt advisory, and special situations M&A has plugged the allied of insolvency, and finance broking sits on the other side of the distress scale.
On the back of that growth that we've seen across the division, we've got margins up to 25.8% from 24.7% last year. Within property advisory, we have revenue growth of 24% to GBP 23.5 million. 8% of that is organic, 16% from prior year acquisitions. Three principal drivers of that growth: auctions, as Ric mentioned previously. We've got increased auction volumes over the course of the six months. That's both organic and from the prior year acquisition of SDL Auctions, which came into the group in December, 12 months ago. Building consultancy has continued its organic development through increasing the number of surveyors in the team. And within valuations, we've seen the growth from the prior year acquisition of Andrew Forbes, which was in November 2023. Margins in property services down a touch on last year at 16.6%. That reflects the normalized activity levels.
In the prior year, we had some enhanced consultancy fees, so we're expecting a dip from the levels that we saw last year, and we've also got further investment costs which are going through the P&L in this year, and that's bringing margins down a touch as well. Our group services costs at GBP 4.9 million, up by 11% on the prior year, but down as a percentage of revenue, so 6.4% of revenue in the six months compared to 6.7% last year. Finance costs increased due to higher debt levels following the buybacks we've done over the last 12 months and IFRS 16 interest charges. A tax rate of 26% is in line with the prior year, and looking at EPS, the basic growth to 5.4p, 17% growth.
That reflects the uplift in earnings, and the diluted at a slightly lower growth rate of 11% to 5.1p reflects share option awards which were awarded in the prior year and some share settled in our payments. Moving to the next slide, we have a reconciliation of our adjusted EBITDA to statutory profits. Adjusted EBITDA are up GBP 2.5 million to GBP 15.3 million. Increase in share-based payments, depreciation of finance costs in aggregate to GBP 0.9 million increase in the six months, giving adjusted profit before tax at GBP 1.6 million to GBP 11.5 million. The acquisition accounting entries are non-underlying items. The acquisition consideration, so that's the consideration which is deemed remuneration under IFRS, and the amortization charge, they're down by GBP 0.7 million on the comparative period. And these charges will progressively reduce over the next couple of years, excluding the impact of any further M&A.
And the negative goodwill and transaction costs, they arise through in-year acquisitions. With no acquisitions in the six-month period, there's nothing in the current year. And that gives us a statutory profit before tax of GBP 4.7 million, up from GBP 3 million last year. We're in a strong financial position. We have significant headroom in our bank facilities. Looking at cash flow for the first six months of the year, which is showing its typical H1 seasonality, adjusted EBITDA are up by GBP 2.5 million.
Our working capital absorption increased slightly from the prior year, GBP 5.7 million compared to GBP 4.6 million last year. Principal driver of the working capital absorption coming from our organic revenue growth. Growth in revenue of GBP 5.4 million from the second half of last year to the first half of this year. And as you know, in insolvency, there is a lockup on that. 4.6 million of that is on the balance sheet.
And we also got that annual profile of payments, which is typically bonuses and some prepaid annual costs accounting for GBP 1.1 million. And our lockup overall at a group level is broadly in line with where we started the year at 4.3 months compared to 4.2 months at the start of the year. Tax payments are broadly in line with last year. And in the other payments of interest, CapEx, and lease payments, a large increase is driven by lease payments, up from GBP 0.7 to GBP 1.4, and that's following the end of some rent-free periods on property leases. And that gives us a free cash flow of GBP 4.3 million, but that's an increase of 8% on the prior year. The current period acquisition payments all relate to earnouts.
There's a further GBP 4.7 million of earnouts which we expect to pay over the course of the second half. And thereafter, so from the start of the new financial year, we will be down to GBP 10.5 million of future earnout payments. The majority of that gets paid over the next two years, so by April 2027, and we'll be fully satisfied by the end of calendar year 2027. We commenced our share buyback in October, GBP 0.8 million cash impact in the period. That was completed in November, and dividend payments of GBP 2 million compared to GBP 1.9 million last year, giving a net cash outflow of GBP 2.4 million for the period. In terms of our net debt and facilities, we closed the six-month period with a net debt of GBP 3.8 million, a small increase from where we were at the start of the year.
With a trailing 12-month EBITDA of about GBP 30 million, that gives very low levels of leverage of about 0.1 x. Looking at the movements in net debt over the course of the last 12 months, so from October 2023 to 2024, we have made acquisition payments of GBP 8.3 million, and we've done GBP 3.7 million of share buybacks, so GBP 12 million of investing cash outflows, which you can see the movement there from a modest net cash position 12 months ago to a modest net debt at the end of the current period. We've got significant levels of headroom within our bank facilities, which we entered into at the start of this calendar year. That's a GBP 35 million funding line from HSBC. It's a GBP 25 million RCF and GBP 10 million accordion that's committed until February 2027.
We've got two one-year extension options, so we'd expect that to run through until February 2029. In terms of guidance, we are confident of a further year of growth in line with current market expectations, which you can see at the bottom of the slide. It's adjusted pre-tax of GBP 23 million-GBP 24.3 million. Market conditions across the group remain supportive for our service lines. That's reflected in good activity levels and positive momentum across the business. Within business recovery, we anticipate continuing growth supported by those market conditions and the increase in the pipeline that I reported earlier. We've retained the capacity within our teams, and they've got the breadth of experience to provide the advice and support required by our clients. Within advisory, we're continuing to invest in the team.
We've got a healthy pipeline of engagements, and we feel well placed to continue the positive progress that we've seen over the course of the first half. And within property advisory, we've got ongoing positive momentum across a range of services, and we're well placed to maintain the financial performance that we saw in half one. Overall, we're confident of building on our strong track record of growth both in the current year and beyond, and we'll do an update on Q3 trading in February of next year. So overall, a very good first half. We're very pleased with where we are at the moment. I'm looking forward, and I'll now pass back to Ric for the operating review.
Thank you, Nick. If we move to slide 11, a look at the insolvency markets. Insolvencies remain at elevated levels, so for this year to December, we're estimating the number will be between 24 and 25 thousand, so very similar to last year. Activity levels are expected to be sustained by the current headwinds. That's continuing demand pressures on businesses, the rising costs pre and post-budget, so that's inflation, the interest rise post-COVID, the recent corporation tax rise, the new National Insurance tax rise, planned employment law changes, and increase in the minimum wage will all impact businesses and the prospect of higher-for-longer interest rates. That means that we think that demand for our services will be sustained over coming years.
It's worth pointing out that administrations remain significantly below the previous peak of 2008 and even below pre-pandemic levels still, but there is some evidence of stress contagion into the mid-market. Indeed, since the Budget, we've seen the number of administrations increase that we're handling, and I think that's indicative of the market generally. Overall, though, the liquidation rate remains at 0.5%, so that's well below the previous recessionary peak of 1%, which in itself was below the previous recessionary peak. As we look forward, we think that it is as likely that insolvency numbers will rise as they will fall as a result of increased pressures on businesses. We're not saying, as we perhaps were six months ago, that we felt that this year and next year would be at elevated levels and then some softening thereafter.
We think there's as much chance that those levels will increase in due course rather than decrease. We'll look at the property market. Supportive market transaction levels for property advisory. Commercial property transaction levels are in line with the prior year, but that remains 6% below pre-pandemic levels. So it's steady, but not particularly exciting. One area of growth, though, has been the auction business. You can see the middle graph on the right with auctions increasing over time generally in the market. And indeed, our initiative to grow our auction business has meant that we've seen significant increased activity. As I've said earlier, there is a desire on the part of many vendors to seek certainty and speed with the transaction, and the auction is a way to achieve that. And generally, bank lending to real estate SMEs increased 4% over the last 12 months.
If you look at the bottom chart on the right, we can see that gradual increase from GBP 50 billion in 2016 to GBP 60 billion today, so not a massive increase, particularly post any inflationary impact on that. So it's a steady market, not an exciting market, but we still have our position in that, and we're growing as we're growing our market share, and any improvement in volumes and value for that overall lending will help our agency valuation and funding services business. Double-digit growth from both divisions. Now, one of the largest national property auctioneers that's covering both residential and commercial online auctions. That's grown in recent years, particularly last year, 2023, with the acquisition of Mark Jenkinson in Sheffield in March and the acquisition of SDL Auctions in December, and that's a Midlands-based business. Good progress with integration of those businesses.
The target is to complete the integration by the end of the year with everybody moved to the Eddisons Auction brand, one back-office platform for all our auction businesses, and focus marketing on a national online offering, and we've seen 3x increase in value of lots auctioned on our platform, comparing this half-year we're reporting on and the comparative period last year. In terms of building consultancy, it's continued to develop. Increased activity levels across a broad client base. Education sector and commercial clients are driving the growth. We've recruited to enhance our expertise and coverage, for example, environmental expertise. We're also anticipating increased planning activity from the government's initiatives on building, and also our continued geographic expansion will help with specialization. We've seen strong growth in business advisory services with a good mix of cyclical and pro-cyclical exposure.
Debt advisory, restructuring, finance broking, and special situations M&A, and the restructuring round of podcasts are an example of our increased awareness or increasing the awareness of both internal and external audiences on our increasing capacity and service lines within advisory. We've seen increased insolvency activity in higher value cases, notably hospitality, construction, haulage, and financial services. Overall, growth is coming from more mid-market insolvencies and distressed advisory work. Just a look at some of the cases we've had over the period, particularly focusing on one called Caskade, which was fast food outlets, over 100 fast food outlets, principally KFC and Taco Bell. That was an advisory assignment. We were brought in to look at cash flow management, credit and negotiation, and running an AMA process to find a buyer quickly or finance quickly.
We were successful in doing that, and over 90 outlets were saved, and we maximized the value to stakeholders. Ultimately, those businesses were sold by a pre-pack administration. So across the whole of Begbies Traynor advisory and insolvency, that particular assignment was worth in excess of GBP 3 million to us. Various other assignments on the right, which I won't go into in detail, but they include various pre-pack administrations, successful funding assignments, and sale of commercial property. In addition to these assignments, of course, there's a regular flow of liquidation work, property valuations, funding proposals, and property sales across the business. Looking at our team and continuing to drive organic growth, 7% growth in fee earners over the last 12 months. Advisory senior hires. We've appointed four partners to one director in the first half, and further appointments are planned for the second half.
I'm pleased to say it's becoming easier to attract senior talent as our expertise and reputation in the mid-market increases. Across building consultancy and valuations, we've had nine senior hires. That's three in consultancy and six in valuations. We've made good progress on learning and development. A leadership development program for over 200 senior leaders has been developed in-house, and that's for anybody within our organization who has some management responsibility. That's been extremely well- received. Live Learn commence delivering remote training on core skills, and we have CPD accreditation for our in-house development courses. That means they meet the needs of professional bodies as well as enhancing the skills of our people. We now have our fourth Save As You Earn scheme launched for qualifying colleagues, and that was oversubscribed.
We've made progress improving initiatives across various IT initiatives, identifying and embedding improved ways of working whilst optimizing use of technology. Bespoke development for insolvency and the best-of-breed third-party solutions for each of our property services. There's an ongoing focus to mitigate the headwinds of increased employment costs. That's looking at our pricing, looking at efficiency, and looking at cost management. We're making good progress on the medium-term revenue target of GBP 200 million. In terms of organic growth, it's targeted through the retention and development of existing employees, recruitment of new talent, increased engagement size together with enhanced cross-selling, and investment in technology and process. Our acquisition strategy is in either existing or complementary services. We're operating in fragmented markets, which gives us plenty of opportunity. We have a disciplined process for assessing acquisitions, which is well proven over time.
Clear post-acquisition integration strategy and proven track record value delivery. Our aims are to get the most out of acquisitions and maximize the value over the long term. If we move to the next slide, good example of using acquisitions to grow the business. This is our property business, which is still focused on valuations, asset sales, and consultancy. It was created through the acquisition of Eddisons in December 2014. We've had 14 further bolt-on acquisitions to grow the division, eight of them specialists and six general practices. The investment cost of GBP 27 million acquired revenue of GBP 27 million. We now have a revenue run rate of about GBP 47 million. The typical acquisition size is between GBP 0.5 million to GBP 5 million, which is our sweet spot, and we continue to execute the growth strategy.
The M&A opportunities are in line with the strategy to date, so the things we're looking at are up to GBP 5 million turnover, and organic growth through recruitment of new talent and investment in technology and process, and overall, we've tripled the size of the business with a six-fold increase in profit before tax, so revenue increased from the financial year 2015 of GBP 45 million to GBP 136 million last year and GBP 150 million run rate now. Profit growth is 6x up to GBP 22 million and more for this year, and we've seen a cumulative average growth rate of 7% in our dividends. As I've said, that's the eighth year of consecutive increases we've just announced while retaining sufficient cash in the business to make these acquisitions. Summary and outlook: a strong first half performance and confidence of delivering expectations for the full year.
We've continued to execute the strategy to grow the business in the period. Proven strategy for growth across the cycle, making good progress towards our medium-term revenue targets of GBP 200 million, driven by a combination of organic growth and acquisitions. Market conditions remain supportive for our service lines with strong activity levels and positive momentum across the business, and we're confident of continuing to build on our strong track record of growth in the current year and beyond, and if we leave that investment case on the screen and we're ready for questions.
And we'll go to Justin Bates at Canaccord.
Yeah, thanks. Good morning, gents. Thank you for the presentation. Just a couple of questions from me, or three actually. If we start with the outlook for bank lending in the next, as you see it in the next 12-24 months in relation to the commercial real estate market, and any notable subsector activity that you wish to highlight, sort of good or bad within commercial real estate, please.
Secondly, thank you for putting the figure on Caskade. Again, looking forward over the next 12-24 months, is there anything in your workstream that you think would be of a similar size, or is that an outsized return? And then finally, talking about M&A, the outlook for bolt-on M&A, probably I'm guessing particularly in property, but just if you could touch on anything in terms of your pipeline. I appreciate you're not going to touch on targets in particular, but just the sort of size of deals that you might be looking at, again, over a 12 to 24 month view, that would be helpful. Thank you.
Well, morning, Justin. I think there's four questions there, isn't there? But if we start with the outlook for bank lending, well, we think a cautious increase along the lines that we've seen over the last year. So we thought it's fairly flat. So a little bit of modest increase and no deterioration is what we're planning for, but it is the greater unknown, of course. Notable any subsectors of activity, etc.? I would say that we are seeing that industrials is still healthy on the property side. Office activity has been weak. I'm told that it's getting better for quality offices, but that's not particularly our marketplace.
But generally, across agency, it's a little bit tougher. It's taking a bit longer to sell properties. There's still a mismatch between expectations of buyers and sellers. And I think that's what's driving more people to the auctions, where they need to get a swift sale. And that might be because it's very distressed and ultimately our client is the lender rather than the property owner, or it's just property owners looking for that certainty and to turn their asset into cash. We're seeing more of that, and I think that's driven by the pretty tepid general property market. In terms of any big jobs proposed, I would be very disappointed if we don't at least match Caskade over the course of the next six months in terms of a new case.
While that is an outlier for us, it's not untypical of the cases that we'd hope to get once or twice a year, as well as those which are GBP 500,000 and above. So it's a nice case, but I could quote you probably another half a dozen similar cases that we've had over the course of the last three years or so. In terms of M&A, yes, the focus is on property at the moment and typically up to GBP 5 million turnover. That's to expand our geographic base, so that's general practices in areas where we currently aren't operating, and looking at specialist areas to increase our number of specializations and also to enhance the ones that we've got where there are specialist boutiques we can bring in, property consultancy, for example, which will boost the size of that division.
In terms of our sweet spots, once you get above GBP 10 million turnover, it becomes a more competitive environment, and it's more difficult to negotiate an acquisition, either because of that competition, which means that perhaps we'd have to pay more than we want to, or perhaps our requirement for people to be locked in for five years is something that a competitor won't require, and we'd be expected to relax that, which we're not prepared to do. Also, some of those bigger businesses in professional services are still partnerships, and if they're a bigger business, there are more partners who've all got to agree that actually it's the right thing to do. So we find up to GBP five million, it tends to be very tightly held equity. A decision is more forthcoming, and there's very little competition. So hopefully that answers all four questions.
We've got a question from Jamie Murray at Shore Capital, who's written it, saying, "Great results today. Could you please provide some color on how you've successfully targeted higher quality mandates in business recovery division and whether that is a trend that's sustainable over the near to medium term?"
To answer the second part first, we certainly hope it's sustainable over the short, medium, and long term. It's been a concerted effort on our part to invest in advisory, to invest in our own existing team and bringing people from the insolvency department who've got the appropriate skills and allow them to focus on marketing their skills in advisory and growing a business, and then looking at bringing in people from outside, as we've shown in this presentation, bringing in senior people who obviously are expensive.
It's a big investment for us, but they bring with them a wealth of expertise and a reputation, and that hopefully will give us a momentum within advisory to continue to grow that business and to grow up into the middle market and do even larger and more complex assignments, and we've got a question from Gavin Laidlaw at Stockwatch. What are your future share buyback plans versus asset allocation with your want for deals? Well, it depends to a large extent on what opportunities come along in our pipeline. Our first thoughts are to acquire good businesses at the right price, and we think that ultimately is the best way of getting shareholder value. But obviously, we are mindful of the fact that we are generating cash, and that cash can be, if it isn't spent on these acquisitions, returned to shareholders as dividend or share buybacks.
At the moment, there isn't, in the short term, another share buyback program planned, but we have the option to do that, and it's something we've very much got in mind. Nick, as keeper of the cash, do you want to add anything to that?
Not really. I think it's just to clarify that the buybacks that we've done over the course of the last 12 months were partly in response to what we believe is an undervalued share price. So it was opportune to use our buyback capability. And it was also because we knew we had the use of shares for some earnouts, which could be share settlements. There's nothing of that scale on the horizon. So as Ric said, it would be more a strategic allocation of capital point than would cause any further share buybacks.
We'll go to Andy Edmond, Equity Development.
Yeah, morning, gents. Well done. Good numbers. Just a few things. Post-budget, and Ric, interesting to hear already, it wasn't that long ago, you were seeing signs of more activity in administrations. Are there any other areas, advisory transactions, where you're starting to see perhaps a pickup in inquiries as opposed to moving on to transactions yet?
Well, I would say that we had seen more activity. The budget obviously was something which disrupted the period effectively from July right the way through to the end of October, particularly in terms of potential business sales. If something was in the pipeline, generally, then vendors were desperate to try and get it over the line before October, anticipating significant increases in capital gains tax. Obviously, an increase has come, but it's not quite as draconian as might have been expected.
So we are seeing people starting to come back now and say perhaps it's the right time to look to sell their business. But in terms of completed transactions for us, that's something which won't hit the second half of this year. It's something which will be into next year and beyond because of the time it takes actually to put the information in place, find a buyer, negotiate, etc., etc. So we're hopeful that now there is hopefully a fairly stable capital gains tax position that we will see corporate finance starting to be more active again.
Yeah, so we appreciate the time. And I was just interested in inquiries. As you say, a lot of pent-up demand. It was a summer of inactivity as people waited to see the tax positions. So that makes sense. Just for clarity, you mentioned increasing staff at a good rate, particularly at the senior level. Did the four partners come courtesy of acquisitions made, or have they been attracted on a case-by-case individual basis?
Individual basis. It's a strategy of going out and recruiting. So we are directly recruiting senior hires into the business.
And then lastly, auctions has gone very well. As you said, you've achieved a national reach, a strong position now. Does that mean growth in auctions is likely to be organic from here on in?
Well, we hope both. There are a number of smaller auction houses around, and while ultimately we want a national platform, since COVID, auctions are now online as the norm. So that's a massive change, but it also gives the opportunity to create national practice with significant marketing.
But a lot of these smaller auction houses have a very, very strong and loyal local following. So bringing them on board as well as organic growth would be the best way to grow the practice as quickly as possible.
And James Fletcher from Berenberg has typed in two questions. The first is, could you give me some color on mitigation actions on National Insurance rises and how long you expect it takes to recover, if at all?
It's early days at the moment, James. How can we mitigate it? Well, we can look at pricing, which we are doing at the moment, but that will have only a partial ability to mitigate because, as you know, in insolvency on a number of cases, we are fee-bound by the assets in the case. And within property, it's a pretty competitive market for pricing overall.
It's looking at how we can effectively use our cost base and how we can digitize as much as possible. And there's lots of projects underway at the moment, as Ric outlined in one of his slides in the deck. It's looking at how we can digitize to make our processes more efficient so that it takes less manpower in terms of doing the work, and 75% of our resource base is people cost. If we can do that more efficiently, then the advantage of being in a growing business is that we're always looking to increase headcount. If we can grow the top line without having to grow the headcount quite as much, then that gives us the ability to hopefully offset as much as possible of the NI rise. It's early days at the moment in terms of having clear visibility.
The only clear visibility we've got is from the 1st of April, the tax rise comes in. So that's why we've been pretty cautious at the moment in terms of the guidance that we've given and for the impact on us next year.
And James's second question, could you talk more color on the White Maund's recent deal? Is it small in terms of deal size and contribution to the group?
Yes, it is small. It's effectively recruitment of a team that brings with them their working programs, etc. It is the whole of the business White Maund , but it's a small business, and it will bolt on to our Brighton office. So there should be some synergies taking costs out, etc., as well as bringing two senior colleagues, appointment takers with their own route to market to join us. So a nice little add-on.
We'd be happy to do 10 of those a year, but each one isn't big enough to move the needle, as it were, but they all contribute ultimately.
And Caroline Gulliver at Equity Development says, "You've been very disciplined on prices paid for acquisitions. How are you seeing expectations from potential sellers?"
Well, at the moment, it's still very much within the range that we've paid to date. As I say, for larger acquisitions, it's a slightly different landscape, and the expectations are higher. But the businesses we're focusing on, those up to GBP 5 million turnover, it's very much the same. It's at the multiple of five for the smaller ones and the ones where what we call retirement scenarios, where the owner of the business or the senior partner of the business wants to retire in less than five years, then obviously we'll price it accordingly.
For the bigger businesses with a higher margin up to a P of seven, we're prepared to pay. Five to seven is our parameters.
We've got a second question from Gavin Laidlaw at Stockwatch. "Can you flesh out the looking at pricing comments and cost management you plan? What have the fees been in the past?"
Oh, right. In terms of our charge-out rates for insolvency, they vary depending on the seniority of the people. Our last increase was 10%. Was that a year ago, Nick? It's something that we don't necessarily increase every year. It's more periodic. 10% was last year. Maybe we would have left it another year until reviewing those rates, but we certainly will be looking at them again this time in order to ensure there's some mitigation.
Those rates are obviously varied depending on the seniority of our people, and they're very much competitive rates for the mid-market. We'd compare ourselves to the likes of Grant Thornton, BDO, FRP, etc.
We've got a few questions from Frederik Johansen from HC Capital. His first question is, "You've previously mentioned the property business can make 18%-19%-ish margins. It's now at 16.6%. Why is there the decrease, and is this the level we should be penciling in going forward?"
Yeah, more for Nick, I think, there.
Yeah. 18-19 would be our target margin. We're at the upper end of that scale last year. It was flooded by some one-off consultancy fees, which we did highlight at the end of last year.
But also in the current year, we have got some investment costs going to the P&L, so that's why we've brought people in. There's a cost of recruitment and a cost whilst they get fully up to speed, and that's brought margins down slightly, but I would expect them to normalize around that 18% moving forwards. I mean, pricing is pretty key at the moment in property advisory. I think it's more competitive than other areas of professional services, but I think we should be able to get back up to that sort of range, hopefully over the course of the next 12 months. But the NI headwind will impact on that division as much as it does the rest of the group.
And his second question is, "Growth is good at 11% organic, but is there a reason why competition such as FRP is growing quicker?"
Well, in terms of the competition generally, it's difficult to know because their results aren't published. FRP is an exception to that. And I would imagine it's because of their ability to win more mid-market work than we do. So our goal of getting more mid-market work over time is working, but I think that they're already ahead of us on that, and we've got some catching up to do. Nick, would you add a thing to that?
No, that's how it appears. I mean, that growth of 11% when you compare it to what we see in terms of the market by volume, that's by volume rather than value, the external data that's available that was on Ric's slide, then that's a flat market. So we're clearly outperforming other people in the market, but there's only one other firm where you can actually see numbers.
And final question from Frederick. "The new level of lease payments of GBP 1.4 million, is that expected to stay at this level or grow further?"
Yeah, that's a realistic run rate for the six months.
And that's the end of questions. Ric, do you have any closing remarks?
I'd just like to thank everybody for joining us and wish everybody a happy Christmas and a wonderful new year. Thank you very much.