- Begbies Traynor reported half-year turnover expanded by 13% to £65.9m
- Meanwhile, adjusted earnings before nasties grew by £0.9m to £12.8m
- Corporate insolvency volumes across England and Wales have risen
Begbies Traynor expects annual results to align with forecasts after increased business failures boosted demand for its services.
The corporate restructuring specialist saw turnover expand by 13 per cent to £65.9million in the six months ending October, while adjusted earnings before nasties grew by £0.9million to £12.8million.
Interest rate hikes, subdued consumer spending and an absence of pandemic-era government support programmes have forced more British firms into bankruptcy.
Business failures: Interest rate hikes, subdued consumer spending and an absence of pandemic-era government support programmes have forced more firms into bankruptcy
Corporate insolvency volumes across England and Wales grew by about 17 per cent to 24,326 in the year to September, according to the Insolvency Service.
The upsurge was primarily driven by small businesses falling into liquidation, but there was also an uptick in administrations involving larger companies.
In 2023, Begbies was appointed administrator for brewers Love Lane Brewery and Alphabet Brewing, as well as Formula K International, the first UK manufacturer to specialise in go-karts and small cars for the leisure sector.
Begbies expects insolvency activity to continue rising over the second half of the financial year, amid ongoing pressure on the UK economy.
As a result, it is optimistic about achieving annual results in line with expectations, with analysts expecting the Manchester-based firm to make an adjusted pre-tax profit of £21.9million to £22.5million
Begbies told investors: ‘We anticipate that activity levels in our largest service line of insolvency will continue to increase in tandem with the indicators of corporate financial stress in the UK, resulting from the current interest rate and inflation environment.
‘This gives the board confidence that the insolvency team will continue to deliver growth through the second half of the current year and thereafter.’
Due to growing insolvency levels and recent acquisitions, the firm has increased staff numbers by 93 to 1,051 over the past year.
Begbies recently bought business debt specialists Jones Giles & Clay and the chartered surveyors Banks Long & Co.
Neil Shah, director of research at Edison Group, said the company ‘is well-placed to take advantage in this environment of inflation, high interest rates, and general economic uncertainty.’
He added: ‘The company clearly expects these difficult circumstances to persist for some time and that the demand for its services will thus remain high.’
Founded in 1989, Begbies has worked on the administration of British football clubs, including Wrexham FC, Port Vale and former Premier League clubs Wigan Athletic and Huddersfield.
Begbies Traynor Group shares were 2.9 per cent up at 116.5p on Monday morning but have declined by around a fifth since the year started.
