Begbies: Insolvency booming while corporate finance dies
Trading statement says revenues and profits still on track though corporate finance has suffered £1m loss
AIM listed insolvency specialists Begbies Traynor reported this morning that
business recovery work now accounts for 80% of its income while corporate
finance has stalled badly resulting in job cuts.
Begbies says it has been profitable in the first half but has suffered a
£700,000 loss connected to the disposal of a CRM consultancy and corporate
finance has suffered an operating loss of £1m.
The news comes in a trading statement released to the market today covering
the six months ending 31 October this year.
Overall the firm expects the strong insolvency market to buoy up company
results and produce a performance in line with expectations for the full year.
In September analysts at Landsbanki predicted Begbies’annual revenues to be
£57.8m, for 2008/09 with net profits of £5.7m and made the stock a buy. For
2007/08 the figures were £48.1 and £3.9m.
Begbies’ stock in August was at 200p but has been on a downward trend since
then. The price today (Friday) was static at 149p during early trading.
Ric Traynor, executive chairman of Begbies Traynor Group said:
‘We have had a strong first half in our core business of insolvency and
corporate recovery and our positive expectations for the year as a whole are
unchanged.
‘The combination of the share placing in September and our renewed and
increased banking facilities mean that we have adequate resources for the Group
to capitalise further upon an anticipated sustained period of improved new work
flow in our insolvency practice.’
Begbies recently £12.5m from additional share placings and has a debt
facility of around £20m.
Begbies is recruiting into its insolvency division and has made senior
appointments in tax.
