Begbies Traynor’s finance director has predicted an increase in the need for
the company’s turnaround skills, with tough times ahead for businesses and
individuals over the next couple of years.
Graham McInnes, FD of the listed insolvency group, claimed that it had been
involved in lots of ‘preliminary activity’ with financial institutions and their
debtors, forecasting that the annual number of ailing businesses would increase
from 15,000 over the last few years to over 20,000 through to 2007.
He made the claim as Begbies announced a 29% increase in turnover to £14.2m
for the six months ending 31 October 2005, with operating profit up by 60% to
£2.8m from £1.75m.
The growth had mainly been driven by new acquisitions, but he said he
believed the firm would not struggle in the way other consolidators within the
accounting industry had recently.
‘We’ve had to learn from them, understand the dynamics of the model,’ said
‘You must not let senior people walk away with all of the cash from
consolidators, must not make acquisitions too quickly, and don’t overpay for
them,’ added McInnes.
He expected Begbies to purchase smaller ’boutique’ insolvency and consulting
firms at a rate of ‘one every two months’.
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