Begbies Traynor tax division declining

An Insolvency specialists Begbies Traynor has said its insolvency practice so far has not been able to offset the weak trading of its tax practice.

The company warned weak trading in its tax practice and fewer than expected insolvencies will leave the company "slightly below" market expectations, the Financial Times reported.

Ric Traynor, executive chairman, said: "The level of potential growth in insolvency for the year is now not expected to offset fully the weaker than anticipated performance of the tax practice."

Revenue in the tax practice declined from £3.4m for the first half of the year in 2008 to £2.5m for the same period in 2009.

Traynor added: "We expect the business to return to profitability in the second half, but to be marginally loss making for the year as a whole."

The insolvency division did see an increase of 28% from £23m last year to £29.5m in 2009.

Traynor said fiscal easing, low interest rates, and "lenient" creditor attitudes including HMRC, is "masking" the level of financial distress in the country with insolvencies to rise later in the year.

The company saw its shares drop from 106p per share to 92p following the announcement with shares closing yesterday at 95p.

Further reading:

140,000 companies "in severe financial distress"-Begbies Traynor