Financial firm responds to speculation surrounding two properties previously owned by company founder

Ric Traynor

Financial firm Begbies Traynor has responded to press speculation centred on two properties previously owned by Ric Traynor  –  the founder of the business.

The business recovery, financial advisory and property services consultancy, said it was aware of recent press comment and questions in relation to certain transactions.

The Manchester based firm said the transactions have previously been disclosed in accordance with market rules and regulations.

The speculation relates to properties in Manchester and Preston used by the group, which were previously owned or part owned by Ric Traynor, the group’s founder and  executive chairman.

Payments disclosed in the company’s annual reports in relationship to the properties were, respectively, £720,000 per annum in the financial years up to 30 April 2017, which reduced to £156,000 in year end 30 April 2018 and £13,000 in year end 30 April 2019.

The firm said it no longer occupies any properties in which Ric Traynor had an interest.

The principal terms of the Manchester lease were disclosed in an RNS dated 27 July 2017.

In the 2017 statement the firm said it had completed a new lease of its Manchester office which was part owned by Ric Traynor.

The statement said: “The new lease is for a ten year term and incorporates a tenant’s only break clause to terminate the lease at the end of the fifth year. The annualised cost of the Property over the ten year lease term (inclusive of market incentives) is £344,000.

“This lease replaces the group’s previous lease of the property (as disclosed as a related party transaction in the relevant annual report and accounts).

“The new lease represents a significant financial reduction on the previous commitment of approximately £331,000 per annum.  This reflects a smaller lettable area and a reduced cost per sq ft of £23.50 compared to £25.00 (exclusive of market incentives).  In assessing the appropriateness of the new lease, the group has also undertaken a thorough exercise of considering alternative property options in Manchester city centre.

“The new lease represents a related party transaction which, the independent directors consider, having consulted with its nominated advisor Canaccord Genuity Limited, that the terms of the transaction are fair and reasonable insofar as the shareholders are concerned.

“Although not strictly required under the AIM Rules, shareholder consent for the new lease will be sought at the Group’s next annual general meeting in the Autumn.”

The 2017 AGM duly approved the transaction.

If shareholders have any further questions in relation to these transactions or other matters relating to the group, the board will be pleased to address them at the annual general meeting in September.

The principal terms of the Manchester lease were disclosed in a market statement.

The new lease of Manchester office signed in July 2017, the property was part owned by Ric Traynor.

The annualised cost of property was £344,000 – a reduction of approximately £331,000 on the previous lease due to a reduction in lettable area and a reduced cost per sq ft of £23.50 compared to £25.

The lease replaced a previous 10 year lease entered into in 2007 at an annual cost of £675,000 with a tenant’s break at 5 years which was not exercised.

The ownership of the property transferred in financial year end 30 April 2018 and Ric Traynor no longer has an interest in the property.

The leases of two offices in Preston (one owned by Ric Traynor and one owned by his pension scheme) at an aggregate annual cost of £45,000, made up the balance of the £720,000 disclosed amount. These premises had been occupied by the group since 1993 and 1995 respectively.

The original leases on these properties expired in 2014 and 2010 respectively and after those dates the group’s tenancies continued as periodic tenancies with the group having the ability to terminate its occupation on three month’s notice.

The group moved out of both of these properties during financial year end 30 April 2019 and now has a lease of a new office with a third-party landlord.

 

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