BEGBIES TRAYNOR'S latest financial report has shown a decrease in both pre-tax profits and revenue in the last 12 months.
The listed insoovency specialists reported that pre-tax profit had fallen to £2.4m for the year ended 30 April 2013 from £5.5m in 2012, while profit before tax fell to £400,000 compared to £2.1m in 2012. The firm's revenue also declined to £51.1m from £57.7m for the same period a year earlier.
The decline has been attributed to a drop in the number of corporate insolvencies, which were nationally down 10% for the year ended 31 March, compared with the previous year.
A statement from the firm claimed that a significant factor to this had been the more benign economic environment, with low interest rates and more lenient creditor attitudes towards financially weak companies. This has significantly aided businesses that may otherwise have gone into insolvency.
According to a recent 'Red Flag Alert' report, which monitors the financial distress of companies, the number of firms undergoing "critical problems" fell by 34% in the first quarter of 2013, compared with an 8% increase the previous year.
However, Bebgies managed to reduce its net debt to £17.2m from £20.1m, largely due to the firm's ability to lower its cost base by £8m to £44m in the last two years, including reducing its employee base to 501 from 563 a year earlier.
Ric Traynor, chairman of Begbies Traynor (pictured), said: "Last year was a challenging period for our industry with the number of UK corporate insolvency appointments decreasing by 10% over the twelve months to 31 March 2013.
"In this environment we consider that we have delivered a solid financial performance for the year as a result of the ongoing management of our cost base, which has mitigated the impact of lower revenues."
The report also showed that Begvies has entered into new unsecured banking facilities totalling £35m in April which include: a £10m revolving credit with HSBC and the same with Santander both maturing in July 2017; £10m with M&G UK Companies Financing Fund, with £5m maturing in April 2010 and £5m maturing in April 2021; as well as a £5m overdraft facility with HSBC.
"The directors have reviewed the financial resources available to the group and have concluded that the group will be able to operate within the level of its borrowing facilities and have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future," a statement from Nick Taylor, group FD at Begbies Traynor, said.
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