Begbies' margins hit by lack of insolvencies
Half-yearly profits fall at Begbies Traynor, due to lower than expected flow of insolvencies
BEGBIES TRAYNOR’s half year earnings held firm at more than £34m to 31 October 2010, compared to a year earlier.
Revenues came in at £34.4m compared to £34.2m for the same period a year earlier.
Adjusted profit before tax was £3.6m for the six-month period, compared to £4.3m.
The figures were impacted by lower than expected UK insolvencies, said executive chairman Ric Traynor (pictured).
“If, as we expect, there is some pick up in new insolvency engagements through the remainder of the financial year this would result in a modest improvement in revenues in the second half in the core insolvency division, with the full financial benefit of this emerging in the financial year beginning 1 May 2011,” Traynor added in a statement to the stock exchange.
The lower estimated number of insolvencies had a direct impact on activity levels within the division resulting in the year-on-year 9% decrease in revenue, said the firm. As a result of a cost base geared for higher insolvency volumes, this has reduced operating margins in the division to 24% (2009: 29%). Corporate finance activities were also “subdued” during the period, which reflected market conditions.