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.