BEGBIES TRAYNOR EXPECTS pre-tax profits to be lower than last year, according to a trading update by the firm.
The listed accountancy firm, which primarily focuses on insolvency, said it expects first half year pre-tax profits to be about £700,000 lower than last year’s results of £4.3m.
Begbies Traynor, which spent approximately £800,000 on restructuring costs in the last year, said insolvency revenues were down approximately 9% in comparison to the previous year.
The firm attributes the profit warning to a decline in insolvency cases and an increase in finance costs resulting from new banking facilities. Total net debt at the firm was £24.2m at 31 October 2010.
Begbies Traynor said the decline of insolvency work will be largely offset by an improved performance from the firm’s non-insolvency divisions.
The firm expects revenue to be in line with the previous year.
The latest government statistics from the Insolvency Service show that corporate insolvencies across the country fell approximately 7% in the third quarter of this year compared to the second quarter, and 18% compared with the same period in 2009.
The firm believes corporate insolvencies remain lower than expected because of a combination of “lenient creditor attitudes”, and temporary government support initiatives such as the tax deferral scheme Time to Pay. The firm expects the insolvency division to pick up before the end of the financial year when public sector cuts begin to impact the private sector.
Begbies Traynor will issue its half-year results on Thursday 16 December 2010.
Rowan Williams will be responsible for growing the firm’s presence in the Gatwick Diamond and across the south east
Kevin Humphreys joins the insolvency and restructuring firm from the National Crime Agency (NCA) Economic Crime Command
Ann Pomfret joins the Manchester office from BDO
Mark McMullen joins the private client services team from Smith & Williamson