Well, welcome to everybody in the room and on screen, those who've dialed in. This is BTG Consulting plc, our new name, financial results for the year ended 30th of April 2026. I'm Ric Traynor, Executive Chairman. I'm joined by Mark Fry, who is our new Chief Executive Officer, and also Nick Taylor, our not so new Chief Financial Officer. We'll use the usual format. We'll run through the presentation. Then, unlike our colleague from the north, we will take questions at the end of it. If we flip the pages through, we pass the disclaimer, which people can read at their leisure.
Onto slide three. We're very pleased with a year of good progress, delivering against our strategy to build a multi-service line of professional services business resilient across the economic cycle. Strong financial performance ahead of market expectations. Revenue of nearly GBP 170 million, GBP 33.3 million of EBITDA.
A dividend increase of 7% to GBP 4.6 million. Our profit before tax of GBP 25 million is above market expectations. For those who are interested in these things, the statutory profits before tax, 23% increase due to lower underlying items, which no doubt Nick will have somewhere buried in his financial details. It builds on a decade and more of sustained profitable growth, providing a clear pathway towards our GBP 200 million medium-term revenue target. The business model provides resilience through the cycle, diversified mix of counter-cyclical, transactional and asset-related services. That's across our restructuring, advisory and real estate businesses. We've enhanced our leadership team during the period. Mark stepped up to the CEO role about halfway through the period.
We also set up an operating board. We have managing partners of restructuring, advisory, and real estate who've joined the executive directors to manage the business. That board is supported by service line and regional managing partners across the country. A very effective management board. We've seen clear positives since we set that up. We've also completed our rebrand to BTG Consulting plc, which has been well received internally and externally. We feel it's a much better brand and a better umbrella to grow our increased breadth of services rather than using the brand of one particular service line, which has served us extremely well in the past. As we're much broader based now, that BTG Consulting can encompass all the various service lines we currently have and those which may well appear in the future.
We had a strong financial position, nominal debt at the year-end. We have a GBP 35 million facility, which is available for working capital and acquisition opportunities. Moving on to slide four. A proven strategy delivering sustainable growth. Strong track record of organic and value-enhancing acquisitions. Most of those acquisitions have been self-funded through our cash flow. Typically, they've been GBP 1 million-GBP 5 million turnover businesses. We pay 50% upfront and the other 50% over a two or three-year period. That's coming out of the cash flow of the business. That execution is underpinned by strong governance and a disciplined approach to risk. We're focused on delivering sustainable growth in earnings and shareholder value. There are good organic and acquisitive opportunities anticipated. In terms of the statistics there, in terms of growth, they're better covered on the next slide, which shows them graphically.
In terms of revenue, a 15% average growth rate over the last 10 years, which has trebled turnover from some GBP 50 million to the GBP 170 million we are today. Profit before tax has seen a 20% growth on average. We've grown from GBP 5 million to GBP 25 million, 5x increase over that period of time. In terms of dividend, an 8% average growth rate. That dividend is a progressive policy, but bearing in mind we're using some cash to reinvest in the business and those acquisitions. Nonetheless, we paid out GBP 48 million over that period in terms of dividends. Net debt, we've reduced net debt significantly over the last 10 years. Indeed, prior to the last 10 years, it was even higher than the GBP 10 million we're showing here, down to a nominal figure at the end of the current year.
That's after the GBP 48 million of dividends, nearly GBP 6 million of share buybacks and GBP 25 million towards initial acquisition payments. A good strong cash flow over that period. A consistent long-term growth record, prudent risk management, and opportunities to continue the same moving forward. Over to Nick now for the financial review.
Okay. Thanks, Ric. Morning, everybody. Pulling out the key numbers. Revenue, 10% growth. 8% of that's organic, which is good to see, and that builds on the 10% organic growth that we reported in the previous year. It's great to see some of the payback coming from the investment decisions we've made, where we've been focusing a bit more on organic growth. EBITDA up by 5% to GBP 33.3 million. Margins down a touch to 19.8%. A little bit of detail on some of the moving parts in margin over the course of the year. EPS up by 6% to GBP 0.111, and the dividend up by 7% as Ric said, to GBP 0.046 as part of that progressive dividend policy. That net debt at the end of the year of GBP 1 million is having made acquisition payments of GBP 8.1 million.
We've done share buybacks of GBP 1.2 million, and made dividend payments of GBP 6.9 million, and there's a bit more detail on cash flow further in the pack. We start on slide eight with operating performance. It's just looking at a bit more detail at performance by segment. Starting with restructuring and advisory, we're overseeing 9% revenue growth and 5% profit growth. Within restructuring, that's seen strong activity. That's building on the progress we've made over recent years. We've seen growth across all case sizes, but principally coming from larger and more complex cases, which has been a big driver for us over recent times to grow our mid-market exposure. That increase in case quality benefits us because it's higher recovery rates and higher margin work. Within advisory, which we've been growing, there's been some headwinds there.
There's been a backdrop of constrained transactional market, principally on the property side and the ongoing investment. Deal advisory and forensics moved forward. We did well on corporate finance. You may recall at half year, we were talking about some deals which had slipped to second half, which did complete. We've also grown our special situations, our distressed corporate finance team that Mark talked about. The area where we're seeing headwinds has been on our funding business, particularly on the real estate funding side, where the reduction in transactions has held things up. The number of transactions has been not too bad. They're down about 10% year-on-year, but the value is down by more. It's down by about 20%, and that really does hurt us in terms of the overall performance, which is what's caused the drag on margins.
That small number of bigger transactions are the ones which we haven't seen come through over the course of the year. In real estate, it's been another year of double-digit revenue growth, coming pretty much 50/50 between organic and acquired. The organic growth has come from valuations, projects, and developments. Again, on the transactional side, across property agency, we've seen those more challenging market conditions, and it's been a good year for plant and machinery sales and insurance, which is very closely lined up with our restructuring business and our property management team. Looking at margins on slide nine, overall group margin of 16.1%. That's down from 16.9% last year. We saw margins go up within restructuring on the back of the increased work.
Saw real estate hold its margins at 16.8%, and group costs have been well controlled and grown at a lower rate to headline revenue. That's been offset by the more challenging environment for advisory, except what was a strong comparative and some of the targeted investment where there's a lag for bringing people in to generating return. The year-on-year reduction is from a combination of the low transactional activity, which is where the operating leverage moved against us, and those investment costs, and margin progression back up towards the high 16s and into the 17% will be supported by an improvement in that transactional market to get return on some of those recent investments. On a statutory basis, on slide 10, the operating profit GBP 27.2 million. Finance costs down slightly.
That's a combination of both lower interest rates and lower IFRS 16 interest charges, giving us an adjusted pre-tax up 6%. On a statutory basis, we're up by 23% because of the reduction in the acquisition accounting. The acquisition consideration, deemed remuneration down to GBP 7.2 million. That number will reduce again next year to GBP 5.5 million. The legacy of earn-out accounting is fully written off by FY 2029, and the amortization of GBP 3.6 million, that also reduces next year to about GBP 2 million. There's full details in the appendix at the back of the slide deck. All that guidance is assuming no further acquisitions. Any new acquisitions would be on top of those numbers. Cash flow on slide 11, we continue to deliver good levels of cash generation.
There's obviously fluctuations year-over-year for working capital, but over the last five years, whilst the business has been growing, we've converted 90% of EBITDA into operating cash. In the year, it's down slightly to 83%. That contrasts with 97% last year, which just shows those year-over-year movements. The principal drivers that we've had this year has been higher restructuring activity levels, so in the mix, there's been more work done where there's the bigger lockup, so that pulls it back. There were two particular jobs where there was a delay in cash into the new year, and the combination of those two things has pushed the overall lockup at a group level to four and a half months.
Free cash flow of GBP 14.1 million includes normalized tax payments, the GBP 6.7 million we've got this year is broadly equivalent to our 26% of our adjusted pre-tax profits, and that compares to the prior year when we had a benefit from the FY 2024 tax payments. In terms of capital allocation, we've made acquisition payments of GBP 8.1 million. That's GBP 3.7 million on the two deals that we did in the year, GBP 4.4 million earn-outs. We've done GBP 1.2 million of share buybacks and paid GBP 6.9 million in dividends, and that's largely been funded through our free cash flow. We're in a robust financial position. We've got net debt of GBP 1 million at the end of April, and we've got significant headroom within the GBP 35 million facilities which mature in February 2029. Finally, capital allocation.
Our priorities, as you've seen this year and in previous years, is to deploy capital to investing in people and our platform capability, and Mark will talk around a number of the initiatives we've had in the year where we've seen success, and on selective value-enhancing acquisitions as we've done over many years. In terms of shareholder returns, earnings growth, where we've seen a 14% uplift in earnings over the last 10 years, our progressive dividend policy and buybacks to balance dilution. Over the last three years, we've bought back 5.7 million of shares to be used either for acquisitions or for share option awards. That disciplined approach to capital allocation is supported by our earnings growth, by our cash generation, and our balance sheet strength. Overall, it's been a strong financial performance in the year.
We've made really good progress, I'll now hand over to Mark to talk through our operational highlights.
Thanks, Nick. Good morning, everybody. Starting on slide 14. We've had a couple of key events during the year, which Ric mentioned in his introduction. One of those being the rebrand to BTG, which now means that we are one integrated group operating under a unified BTG identity. The other being the refreshment of our leadership team, including myself moving to the CEO role, and also the senior leadership appointments over our three main pillars being restructuring, advisory, and real estate. Commenting briefly on each for the moment. In restructuring, we have continued to strengthen our market leading position. We've had some noticeable case wins in the restructuring arena, which I will comment on a little further on. In advisory, we continue to develop our range of complementary transactional and advisory services. In the last 12 months, we've significantly increased our activity in the special sits M&A space.
Real estate continues to be fast-growing across its service lines. I would draw particular note to its position in the auction market, where it is number three in the U.K. now in relation to both volume and transaction value. Delving a little bit more, restructuring and advisory to start with. A year of growth and strategic delivery. As mentioned, we've refreshed the leadership team. This has been really rewarding because we've had a real refreshed energy and drive internally, across not only the business leaders, but the wider group generally. One of the real areas of focus that we've seen is on cross-service collaboration, which obviously we've been driving, but to get such renewed enthusiasm and engagement around it has been positive. Across the group, they've been working together on cross-service growth initiatives. We're quite excited about that. We've also had investment in capability.
In London, for example, we hired two senior partners from a major competitor. They have both hit the ground running, generating revenue virtually immediately. They've been very positive hires, and we do have ongoing conversations in play for additional people to join the partnership group. Another development that's been going on now probably for the last couple of years, but we're continuing to see it improve, is us attracting inbound talent. We're now seeing more regular inquiries from senior professionals from our competitors who are seeing our market position moving and are now interested in trying to open dialogue and conversations with us around the possibility of joining BTG. That's very positive. Digital marketing. We are continuing to generate instructions. They increased from 12% in 2025 to 15% in 2026, and that represents a 35% growth year- on- year.
Within digital marketing, they are embracing AI, and they're using it to improve processes, but also marketing. Continued to develop our market position across both administrations and liquidations. You can see from the graph that's there on the right, we've had over 190 national appointments across both of those areas on the MFS case, which is a case that, as I said, I'll mention a bit later on. It's been a high volume of appointments related to that case. We also had a particular focus on sector expertise. Examples of that are sport.
We have a real skill set based around sport, not just in football clubs that we've dealt with, but we've been called in in relation to rugby clubs and indeed recently Chelmsford City Racecourse. In healthcare, which is a sector where we've also always had quite a lot of experience, and more latterly financial services, we got our first appointment under the new regime for specialist administrations for either banks or financial institutions, and we've also achieved panel status with the Financial Conduct Authority. In advisory, we've also made some senior hires. We've recruited two partners from Kroll, one in London and one in Birmingham. As I mentioned, we've been developing our special sits M&A practice, which is gaining a good reputation across numerous sectors, including hospitality and leisure, healthcare, and also in retail. We have hired in the forensic team, building that now to four partners.
Next slide, number 16, for real estate. Another area where we have been investing in senior recruitment. We've taken a London auction director from Knight Frank, and we've had two senior hires in the valuations team in Birmingham. Moving back to London, we've also had another senior hire in the public sector valuations area, which is actually a new area of expertise for us. Beneath the senior leadership team within real estate, they've also taken the advantage to refresh the management team. Basically, that's been about giving greater clarity around ownership of each division, and driving strategic initiatives and growth. Real estate benefits significantly from its panel positions, not only from lenders in both the appointment over certain properties in LPAs, but in valuations predominantly, but also increasingly from driving public sector workflow from organizations such as the GCA, Homes England, and the ESPO.
The GCA and ESPO being government procurement agencies, one more generally, and the second one, particularly for schools. In relation to work from those panels, we're seeing an increase in fee size as well. Most recently, a real estate advisory assignment for the London Borough of Southwark generated a fee of GBP 300,000. In the auction space, I've mentioned obviously the market positioning there, but it's also worth mentioning that they've now got an integrated single platform for all of the auctions business, which considering the acquisitions is a good progressive move. They've now also invested in MS Dynamics for them, and they are leveraging that. That's what I've got. Next slide is 17. Just a few case studies. I mentioned Market Financial Solutions. I'm sure this is a case that probably everybody is aware of. It's received lots of media coverage.
It was a collapse of a large mortgage lender. We've achieved, as I said, some 190 appointments across liquidations and administrations from this collapse, 170 of which are administrations. What we have to deal with in this appointment is the disposal of a portfolio of over 100 central London properties, and they have a valuation range starting at GBP 500,000 and ranging up to GBP 35 million. There's also a high degree of fraud, which will require some investigation and cross-collaboration with insolvency firms that have been appointed over other parts of the portfolio. It was a highly complex case to win with significant competition across the restructuring market. The percentage that we've come out with is a tremendous result.
We also had the Sheffield Wednesday Football Club appointment, which has been mentioned previously, but at that stage, we were still running the football club, and we had a buyer in play that unfortunately didn't proceed. Very successfully, we managed to find another buyer, an American purchaser, and we completed the sale very recently. We're very pleased with that. It's a great result for the creditors. It's a great result for the community, the football fans, and of course, Sheffield as well, and for us. We're very pleased with that result. Ambient Support is a case in the healthcare space, and that was an accelerated distressed sale and the subsequent administration. You can see from the notes there, it delivered a sale of 80 care homes, preserving over 800 jobs and continuity of care for over 700 residents.
Another really important factor that I'd like to draw on for those three appointments that I've mentioned is that they are all cases that have required a cross-mix of our services. You can see MFS from the slide, that involved people from restructuring, advisory, and will involve and continues to involve real estate. Sheffield Wednesday is the same. On Ambient Support, it was both restructuring and advisory. A specific retail case example is the one actually I mentioned earlier, and that is one for the London Borough of Southwark. We were appointed to deliver a decarbonization strategy together with design. We supported the funding bid, the plan development. We led the feasibility studies, energy audits, and option appraisals, and managed that project to deliver a material carbon reduction and lower energy costs.
A successful outcome and a better fee and a better quality of work that we're starting to achieve in real estate. Next slide is number 18, acquisitions. During the year, we completed the acquisitions of Kirkby Diamond and Network Auctions, both of which have strengthened the real estate platform. Kirkby Diamond was actually the largest real estate acquisition since the original Eddisons one back in 2014. Network Auctions was a bolt-on to the Eddisons' auction business. Pleased to report that both have integrated well, and they contributed to performance during the year. They extend our geographical reach, broadening service capability and enhancing market position. There are definitely opportunities for further geographic development to grow real estate, and that's identified by the map on the right-hand side of your slide. You can see that the orange dots represent acquired offices and the blue dots are existing offices.
Most importantly, also, you can see the amount of gray space on that map, which highlights the potential for further geographic growth. In restructuring, we completed two small acquisitions following the year end. There was the specialist solvent liquidations website called mvlonline.co.uk, and we acquired Lameys Accountants in the South West, which is a restructuring business, and that will assist our market push into Devon and Cornwall. The framework bits of continued growth highlights areas that we've spoke about, both organic and acquisitive. Rather than go through the slide, I would just like to draw on a theme around attracting, developing, and retaining talent and tell you that we had 100 promotions internally during the year. We had 114 people receiving support for exams. We had seven of our people pass the Joint Insolvency Examination Board, which is an extremely difficult qualification to become a qualified insolvency practitioner.
We had five pass the RICS exams, to become chartered surveyors. As a business, we support the apprentice scheme in the U.K., and we recruited 31 apprentices across the business. Very pleasingly, we have an 87% staff retention rate below the senior leadership team, where it's actually even higher. A good stat. Slide 20, current trading and outlook. As has been mentioned, we've started the financial year with continued momentum, and that is supported by our current activity levels and pipeline visibility. The macroeconomic uncertainty continues to drive demand for our countercyclical services. As was mentioned by Nick, it does impact transactional activity. We are expecting an improvement in margin, but that will be subject to a normalization of those transactional markets and delivering the returns on recent investments. In summary, we anticipate delivering a further year of growth in line with our expectations.
Thank you, Mark. Moving on to summary now. Overall, we're well-positioned to continue building on our long-term track record of growth, supported by our established business model, strong market positions, and disciplined approach to investments. We flick to the next slide, which we'll leave up there, you can peruse that at your leisure. We will take any questions that there might be. Mark.
Hi. Sam Dindol from Stifel. Two questions from me, please. Firstly, on the insolvency market, saw 23,500 appointments in your last financial year. How do you see that progressing? That's still above post-GFC trend. Secondly, on the MFS work, have you got a sense when revenue will peak for that? Is that last year, this year? Or is that going to be a really long job, that sum?
Well, in terms of the first question. We see the market generally being probably stable at this sort of level for the foreseeable future. I mean by that the next year or two. We would hope we would continue to progress and increase in our share of that market, both in terms of the volume and in terms of the more interesting, exciting things that Mark's mentioned. In terms of MFS, that's definitely one for Mark to answer.
We've not taken any revenue on MFS at this point. Obviously, there's assets to realize before we start to get paid. We are certainly expecting that to be a fairly long-running appointment and the fees will be well into the seven figures.
Great. Anybody else?
Can I ask a backwards question? I suppose that as your business has broadened and you're getting a richer mix of more complex stuff, when I look at your historical growth, that's what you were achieving before you were relatively stronger as you are now. Is it logical therefore to think that as you become a better and more integrated, wider service offering sort of a business, that whatever organic growth you expected to get you towards that medium-term target to GBP 200 million in revenues, while we're not putting it and nobody would in the short-term anticipate this, is it logical to expect over time that organic growth could maybe be even higher?
Yes. Obviously, with a large proportion of what we do in the restructuring base, that is the market which does fluctuate over time. At the moment, as I've said, for the next few years, I can't see any reason why that should be materially different to what we've had over the last couple of years. Certainly, as the mix of services moves towards non-restructuring, they're much bigger marketplaces for us to grow into. I would agree, we would hope we'd be able to achieve better organic growth percentages.
In terms of the people you've mentioned quite a few senior hires. They all knew about you before. You were always a potential employer. What are the reasons why they might move now, and how does it work in terms of their economics and your economics of a senior, well-remunerated person who's built within potentially one of the competitors we're not going to name in this room? How does it work for them to come to you?
Mark, do you want to do that one or actually the one who's bringing these people on board?
Yeah. There's been a number of factors in the restructuring space dealing with that firstly. One is market position changes. We've seen some of our competitors go through difficult periods, that's meant that some of their people are looking for other houses.
Yeah.
Of course, we've had our growing reputation and the work that we've achieved within the restructuring market, everybody's got visibility over that. All your competitors, we're all watching each other all the time. They're monitoring our market position change. That's attracted them to us. Yes, we have to manage their expectations around what their packages will be. We can't disrupt too much what we're already paying other people. Otherwise, that will cause us a wider problem.
Yeah.
So far, we've been successful in doing it. We've been successful in managing packages for them. We give them an element of fixed, an element of bonus based on their performance. It's not too out of kilter with what we're doing with other senior people.
Some of these people who are joining us now are used to doing sizes of cases, which they can generate and bring with them. It's self-funding to a large extent. We're able to meet their income aspirations because they're bringing something additional to the party. Also just on top of what Mark said, I'd say that's very much true of the property business, the real estate business as well, both in terms of a growing reputation as we get bigger, also it's an area which has got headwinds at the moment, and there are people who are leaving some of the bigger, well-established organizations looking for a home, and we are potentially a home for them to come and join.
Yeah. If you look across that space, real estate, there's been quite a lot of redundancies made in the bigger practices. That, of course, sends a nervousness across the teams generally.
On selling cross- services, indeed behind the whole restructuring and management of the brand thing, are you tracking metrics on that? You've given us a number of very encouraging high-profile examples, this is obviously going to be quite important too.
Yes, it is. We are setting those systems up and being more methodical about it. Nick, have you got anything?
They're very identifiable projects, some of them as well. One of them, for example, is in the lower property at receivership space, is an area in kind of a solvency-related space where we don't actually achieve as much as we would like and think that we should. We're probably the best-placed firm in the market because we've got both the restructuring expertise and we've got the real estate expertise. If you combine that together and create a market initiative that offers joint services for those appointments, then that should give you a mark on the lenders. We've got another one running in healthcare where we're pulling together different parts of the business, some of the advisory funding guys, the consultancy part, together with real estate and together with the restructuring element. Those groups have got specific leadership which we're reporting back into the exec team.
We'll be consistently managing the progress.
Well, there is a lot like Wednesday, not just the club, but Hillsborough. It's a big development.
Yeah.
Funding, and then the audit funding as well. It makes sense.
Nick, anything to add to that?
No, our systems and data are trying to catch up with everything where the business is overall. For us, the cross-service is far more some of the examples that Mark gave, where doing a job and you have lots of different expertise rather than having accounts of clients that you then constantly try to sell things to, because that's not really the nature of our work. Happens to some extent on the real estate side, where we might have, let's say, a property management client, building consultancy, and what, but it's a relatively small part of the opportunity for us.
Do you need financial incentives for a divisional leader to bring in a colleague, or is it part of the culture and everybody does well if the Topco does well?
I think, yeah, at the moment, it's definitely part of the culture, the driving profit and the bonus pool that's driven from the profit percentage that goes into the bonus pool. It is quite remarkable the renewed energy and drive that's currently there. I've got beef on top and I'm going to keep pushing.
Mm-hmm. Just out of curiosity, auction's gone really well. You're number three. Approximately what market share is that? You have got two people at 45 and you're 10 or anything like you said, or another way of putting it, have you still got a lot further to go in expanding that market?
Yes. It's a big market. The number one and two positions are taken by London-based organizations that do the big ticket stuff.
Breaking into that would be a major challenge. We aspire to that one day, but it's much more likely we'll be moving more into taking volume.
That will include both marketing hard what we've got, because we've got the basis of a national framework now, particularly with that small acquisition in London. There are other potential acquisitions of small auction houses to do. That's focusing on the volume. To crack that London market is something we would like to do in time, but it's not easy.
Yeah
I don't know.
Plenty more to go for.
Yeah. Plenty more to go for, basically, yeah. In terms of capital value, about GBP 350 million over last year in terms of the value of the properties sold. Looking to double that over time would not seem an unreasonable workflow to have.
It's an eclectic mix.
Yeah.
Respect. Right. What about pricing, Nick? Anything material happening in any parts of the business?
No. We've managed to push on price where we can. We've put our charge-out rate up where we bill by the hour.
Of course, that's subject to recoveries on the cases, whether we get that. We've been fortunate in the year that we've had some bigger cases where we get more per hour. A lot of the business is driven by the value of the transaction. Across the auctions, agency, all those sorts of areas, then ultimately we want a percentage of success. Either way, without having to go on those.
Yeah. On the cost side, I hope we can see what Greg's friend at Number 10 up north is going to do, but hopefully nothing. You've dealt well with National Insurance.
Oh, no. National Insurance was obviously frustrating.
Surprises you can't predict.
GBP 1.5 million.
Yeah. This year.
This year.
Yeah.
Which, it's a great part of the business. We did manage to recover it, in real estate where we managed to hold our margins and we recovered it in restructuring. It's across the board, we'd have been in a better position, clearly, if we hadn't had that. The minimum wage also has an impact because as Mark said, we do invest in people at the early stage of their career, and that's become a lot more expensive for us this year as well.
In terms of what the future holds, none of us know, do we? Unfortunately, it's all very vague.
Including the Prime Minister- elect.
Yes.
Yeah.
brings us onto the balance sheet, which is dreadful for the country, but pretty good for you.
What's the right balance sheet structure for your business? You could run a pile of debt if you wanted to because of the nature of your revenues.
Yeah.
I suppose at the same time, you make really good economic returns with no leverage. What is the framework for, let's say it's another little auction house. I know scale of it is really small, but when you think about the returns you make from a GBP 500,000 spend on another little auction house, how do you think about what returns you make from that?
What, from a small auction house?
Yeah. From a small acquisition. How do you think about that and how does that fit into? Hypothetically, I don't know, there might be a lot of such deals and then you sort of think, "Well, why couldn't we be running five or 10 of net debt hypothetically?
Yeah. Well, in terms of running net debt, we're quite happy to do that if we find the right acquisition opportunities. The small auction house, ideally it's a bolt- on, we can take some costs out of it. We're looking at the way that we value these businesses is on ideally on a after-tax P/E of 5. The smaller ones tend to come into that. The bigger ones that we've done have probably been more 6+ , I would say.
Mm-hmm. Yeah.
Particularly if we find the larger acquisitions, if we look back over our history, Eddisons, of course, has been a great success for us, and that was the biggest acquisition we'd done at a GBP 40 million turnover business. We did two insolvency boutiques in 2021, which were both GBP 10 million each, that gave us a step change both in terms of our overall fees in restructuring, but also in terms of the platform that we had to start attracting better people, et cetera, et cetera, the profile of the business. We would like to do some of those. The problem is that in the restructuring world, there aren't really any to do anymore.
Yeah.
In the property world, there are some to do, but they're problematic. They're problematic because they typically, if they're over the size of say GBP 10 million plus, they're a traditional partnership, there are lots of partners-
Yeah
All those partners have to agree that that's what they want to do.
Yeah.
We've had discussions, very serious discussions in the past got very close to deals, they've fallen away at the last minute because some of the partners changed their mind. It's very frustrating. If we found one where the equity was tightly held, clearly those who held the equity did want to make that decision maybe because of their stage of life, et cetera, then we'd be delighted to do those businesses. If it involved taking on some debt, we'd be very comfortable doing that.
Thank you. You've mentioned the acquisition pipeline is pretty good from your perspective. Might that include something of GBP 10 million-GBP 20 million? Yeah.
Well, the pipeline in terms of discussions, et cetera, it does.
In terms of how-
Could be, yeah
Can we get them over the line or not is a different matter. To date, on the property side, other than Eddisons, and then recently this Kirkby Diamond, which is a great business.
It's not quite GBP 10 million turnover, it's bigger than the average that we've been doing. That was successful. We're delighted with that. We are hopeful that there will be some bigger ones in due course. There are also the GBP 1 million-GBP 5 million turnover ones which are the right valuation and typically the decision makers are one, two, or three people, and it's easy to get them over the line.
You've got the intel machine to process.
Yes
those.
Yeah.
Expeditively.
Yeah.
Okay.
Just one last one from me. In terms of professional services firms or the AI question keeps coming up, I think for me, I'd love to hear some more views from you guys. Is there any areas of process where you could improve it with AI, or how do you see it impacting the industry?
We're looking at the moment. We can't see anything which is absolutely transformational to our business, so it's more at the edges. Looking at how we deal with the volume side of insolvency, for example, Mark mentioned the digital side, where it's typically a high volume of relatively low-value cases. The more we can use technology in there, the less people cost is involved in those cases, and they tend to be effectively a fixed fee. There are opportunities there, and there should be some opportunities on the property side as well, where again, we're doing volume of things like the valuations business where typically we're doing thousands of valuations a year, and typically the fees for those are GBP 1,500- GBP 2,500.
Okay.
If you can get some more technology in there, and still charge the same fee, it's all margin accretive. Splendid.
Good.
No more questions. Thank you very much indeed everybody in the room and on the screen. Thank you for joining us.