Shares in Begbies Traynor (AIM:BEG) climbed 8% after the insolvency specialist said it expects revenue for the current financial year to reach the upper end of market expectations, driven by an increase in larger and more complex corporate failures.
The group reported a 12% rise in revenue to £153.7 million for the year to 30 April, while pre-tax profits nearly doubled to £11.5 million.
Its business recovery and advisory division, which generates 55% of group turnover, was boosted by higher-value cases despite a modest decline in UK corporate insolvency numbers overall.
The insolvency order book grew to £78.6 million from £71.9 million, underlining strong demand for its services.
Chairman Ric Traynor said current trading momentum and ongoing recruitment of senior staff would support further growth.
Profits for the year ahead remain on track, helping to offset rising wage and tax costs.
Stifel repeated its 'buy' advice in the wake of the results with a target of 160p.
It described the current share price as a 'compelling entry' point for new investors, with the stock trading at just 10 times next year’s expected earnings.
A strong cash free cash flow yield of 8% and a 3.8% dividend return also make this a solid investment opportunity, the broker said.
The shares rose 8.7p to 119.7p.