Begbies sells Red Flag division to its chairman
Listed firm offloads its struggling Red Flag division to chairman Ric Traynor, with the firm retaining a minority interest
BEGBIES TRAYNOR has sold its specialist credit risk and database arm, Red Flag A!ert LLP to its group executive chairman.
The consultancy that enables subscribers to target, assess and monitor the performance of customers, suppliers and competitors has been bought by the firm’s group chairman Ric Traynor (pictured).
According to a statement from the listed accountancy firm Traynor has acquired the controlling interest with the firm retaining a minority interest in the partnership.
The firm announced in its results in July last year that it was looking to offload its Red Flag division.
Traynor has committed to inject up to £1m of new capital to fund ongoing losses and its future development. Begbies Traynor stand to recoup £1.5m of the investment it has already made as well as future shares of any trading profits.
The current management will continue to work at the Red Flag division, which employs about 24 people, and Traynor will stay on as chairman.
For the year ended 30 April 2011 the Red Flag business generated revenues of £200,000, nothing in 2010, and an operating loss of £700,000, a loss of £600,000 in 2010. Net liabilities at 30 April 2011 were £300,000. The division was reported as a discontinued operation in the group’s half year results announcement issued in December 2011.
Following a disposal process at the firm, it was decided that the division was “not yet sufficiently established for consideration as a standalone acquisition opportunity”.