INSOLVENCY outfit Begbies Traynor has reported a dramatic fall in profits.
The announcement to the Stock Market follows a warning in May that its full year results would be below market expectations as a result of a decline in the number of corporate failures.
Pre-tax profits plunged £2.4m for the year until the end of April, well down on the £5.5m in the previous year. Its revenues were also down by a double-digit fall (10%) to £51m.
It blamed the results on fewer firms going into administration, with the number of UK corporate insolvencies in the first quarter of the year falling to 11.3% compared to the same period last year and have sunk to their lowest level since the end of 2007, according to official figures from the Insolvency Service.
Commenting on the results, Ric Traynor, Begbies Traynor’s executive chairman, said: “This has been a year of significant change for the group. We completed the strategic acquisition of the Eddisons property consultancy in December 2014, made two bolt-on insolvency acquisitions, managed the cost base in our insolvency division and closed the loss-making global risk partners division.”
“The group is now focussed on two complementary operating divisions which positions the group to take advantage of the cyclicality of the insolvency market, where we have maintained our market-leading position by number of appointments, and developing our property services.”
It said the reduced cost base in the insolvency division, fused with the removal of losses from the discontinued business and impact of the Eddisons acquisition leaves the group “well placed in the new financial year”.
Over the last year Begbies has axed around 60 jobs in a bid to cut costs.
In November 2011 it offloaded its tax division for £2.9m in cash to Top 10 firm Smith & Williamson.
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