LISTED FIRM BEGBIES TRAYNOR has revealed a reduction in staff within its insolvency division and an overall fall in profits in its latest half-year results.
Profit before tax fell to £2m for the six months to 31 October, from £3.4m for the same period last year and £2.1m compared to the preceding six months ended 30 April 2012.
Revenues were also down to £26.1m from £29.4m, compared to 2011 half year results.
Insolvency continues to prove a challenging market for the firm, which has reduced the number of staff in this division by about 3.5% to 449 at 31 October from 466 at the start of the financial year.
Profit in this division decreased to £6m from £7.2m for the same period last year, due to the reduction in revenue to £24m from £26.8m for insolvency.
Government statistics show that the UK insolvency market was 10% lower than the previous year for the third quarter.
Ric Traynor (pictured), executive chairman of Begbies Traynor, said: “Challenging market conditions have persisted with lower levels of activity in the insolvency market over the summer months. Overall, this led to a group performance with lower revenues and profits than the comparative period. In spite of this, the business remains profitable and continues to generate good operating margins through ongoing management of the group’s cost base.”
Traynor expects corporate insolvencies to remain stable in the future, although it will remain challenging.
This is the first period in which the firm has operated in its restructured form following the sale of various divisions such as the tax and red flag operations.
However, other areas of decrease include its global risk division which fell to £2.2m from £2.6m generating a profit of £200,000 – the same profit reported for the corresponding period last year.
Global risk is a specialist risk, forensic investigation and security consultancy with services such as forensic technology, accountancy and risk as well as corporate intelligence and investigations.
Despite the fall in revenues, net borrowing fell dramatically to £18.3m from £27.3m leaving significant headroom for the firm which has credit facilities of £35m. Traynor also said he believes the firm’s trading for the full year will be unchanged from the year before.
“We anticipate an improvement in activity in the second half of the financial year during the traditionally busier winter months. Given this, we currently anticipate that the group’s performance for the year as a whole will be broadly in line with last year,” he said.
“Over the last two years, the group has reduced like for like costs in its continuing businesses by £5m per annum, whilst maintaining the potential to significantly improve its financial performance should more favourable market conditions return.”
Richard Oddy, Casper Kaars Sijpesteijn and Rory Goldthorpe have been appointed to senior roles in key sectors of high growth, with a further 17 junior and experienced hires
Richard White, Nicola Westbrooke and Richard Ross all join from KPMG, where they oversaw the real estate tax practice
Sheryl Davis joins the firm's High Wycombe office from Barnes Roffe
The appointments have been made across the VAT, audit and international tax teams