BEGBIES TRAYNOR continues to struggle as businesses stave off administration, according to the firm’s latest trading update.
The firm’s main revenue is generated from its insolvency division, however insolvencies have remained low in the last year. Begbies has had to tighten its belt by cutting 50 staff and closing six offices since March.
A statement from the firm said that UK corporate insolvencies remain “challenging” during the first quarter of 2011, adding that there are no signs of large volumes of recoveries on the horizon in spite of numerous “financial stress” indicators in the UK.
The Begbies board has taken actions to realign its cost base as announced earlier this year, which is likely to cost £3m. A review is underway to look at the value of its goodwill and unbilled income relating to its tax division, with details to be published in July.
The firm claims that net debt is lower than expected as a result of strong operating cashflow.
Ric Traynor (pictured), chairman of Begbies Traynor, said: “The group’s performance has stabilised following a disappointing year.
“We have taken action to realign the business to current levels of activity, while maintaining our leading market position in UK SME insolvency and retaining the capacity to take advantage of any upturn in this market.”
The trading update is for the year ending 30 April and comes ahead of financial results to be published on 7 July.
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