As businesses in the United Kingdom face operational failures due to inflation, high interest rate, subdued consumer spending and absence of pandemic-era government support programmes, corporate restructuring specialist Begbies Traynor expressed confidence in its full-year outlook despite interim profits falling year-on-year as “increased business failures boosted demand for its services”.
The venture’s revenues increased 13% in the six months ended 31 October to 65.9 million pounds. However, profits slipped from 5.0 million pounds to 3.0 million pounds as it boosted staff levels to better manage a growing number of insolvencies.
Adjusted earnings per share were up from 4.4% at the same time in 2022 at 4.6%. While the firm’s insolvency and financial advisory units performed well, their property advisory and transactional services counterparts continued to provide the business with a solid growth platform.
Begbies Traynor remains confident of delivering full-year results in line with current market expectations, as it is expected to see a continued increase in insolvency activity.
As per the Insolvency Service, corporate insolvency volumes across England and Wales have grown by about 17% to 24,326 in the year to September, a stat which will give the Rishi Sunak government sleepless nights.
While a significant number of small businesses fell into liquidation, there was also an uptick in administrations involving larger companies.
Begbies Traynor now expects the overall insolvency activity to continue rising over the second half of the 2023-24 financial year, amid ongoing pressure on the British economy.
“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,” the venture told its investors further.
The firm has increased staff numbers by 93 to 1,051 since 2022. It also bought business debt specialists Jones Giles & Clay and the chartered surveyors Banks Long & Co.
Founded in 1989, Begbies Traynor has the distinction of working with British football clubs like Wrexham FC, Port Vale, and former Premier League sides Wigan Athletic and Huddersfield.