One man's meat is another man's poison, to use a well worn cliche, but it's an aphorism that is perhaps never more true than when applied to the world of business recovery specialists. Someone's tragedy - a business going down the tubes - is, well, good news for the bottom line of an insolvency practitioner.
For those experts among you this isn’t saying very much, I know, but it does allow me to link nicely to some recent news that illustrates the point.
Firstly the most recent. For those of you wishing you got the work to rescue the ailing retailer Allders, you’ll be fascinated to know the firm that did, Kroll, has just bought up another big US player, Talbot Hughes McKillip.
Kroll seem a little shy about the consideration for the deal but it does mean there’s an even bigger competitor out there for some big restructuring and insolvency work.
Kroll believes their hand is particularly strengthened in Europe. Bear in mind Kroll once worked on Marconi, and you know what I mean by big.
Then there was the news in January from Begbies Traynor. One of the sector’s smaller players (but no less interesting for that), they announced their first annual results – profits before tax of £570,000 on a turnover of £11m – along with a boast from their eponymous leader, Ric Traynor, that they are well placed to double their numbers by 2007.
Traynor, it seems, is optimistic that his firm will grow its business, which must at least mean that there will be some organic improvement.
Lastly there’s the research from Euler Hermes, on this page, that insolvencies will rise in 2005. Globally they will increase by just 1%, but will reach 11% in the UK, 9% in the Netherlands and 5% in Spain.
That’s quite a bit of doom and gloom. Kroll and Begbies, at either end of the marketplace, are optimistic about their futures and seem to have an inkling that there are prosperous times ahead for their profession, even though it will mean bad news for others.
Which brings me back to meat and poison, I guess. If the sector believes it may be about to feed pretty well, things could be a little sour for the rest of the economy.