Begbies Traynor profits slump amid challenging market conditions

PRE-TAX profits at Begbies Traynor dived during the six months ended 31 October 2015 owing to challenging market conditions, the insolvency specialist said in its half year results.

A 10% year-on-year reduction in the number of UK corporate insolvencies in the six months to 30 September 2015 helped drag profits down to £600,000 from £1.5m, the firm said. Sales during the period improved to £25.5m from £20.8m.

Begbies said the impact of reductions in revenue in its insolvency division had been “largely mitigated through continued cost control”, while sales across the business were supported by the acquisition of Eddisons, its property consultancy, last year.

Overall market conditions have led to reductions in revenue in its insolvency division but the impact of this has been largely mitigated through continued cost control.

“We have made progress in increasing our market share in this challenging climate and remain the leading UK corporate appointment taker by volume, Ric Traynor, Begbies’ executive chairman said.

The firm acquired the trade and certain assets of The P&A Partnership insolvency practice via a pre-pack deal worth of £860,000 in September and added specialist business property valuation consultancy Taylors after the period end.

“With no indications of a change to the benign financing environment in the UK which would cause an increase in insolvency levels, we remain cautious about activity levels in the insolvency division in the near term and will continue to focus on managing costs accordingly,” Traynor said.

“Overall, our expectations for the year as a whole remain unchanged. We will continue to look for opportunities to develop and enhance the group, both organically and through selective acquisitions. We will provide an update on third quarter trading in early March 2016.”