Restructuring specialists see ‘continued growth’ as economic headwinds increase

Restructuring and recovery specialists Begbies Traynor expects “continued growth” after recording a double-digit increase in revenues and profits in its financial first half.

The Manchester-headquartered advisers has seen an “increased order book, higher level of enquiries and increasing economic headwinds” as corporate insolvencies and company distress levels have risen.

Begbies Traynor generated adjusted pre-tax profits of £9.0m in the six months to October, an increase of 13%.

Its business recovery and financial advisory division accounts for 70% of the group’s £58.5m half-year revenues, and its property advisory division – which includes Eddisons – contributing the rest.

Ric Traynor, executive chairman of Begbies Traynor Group, said: “The group’s strong performance builds on our consistent track record of growth, with double digit increases in revenues and profits from both divisions which we have continued to grow organically and through acquisitions.”

The company highlighted that while the 20,000 corporate insolvencies in the year to September was up by nearly a quarter on pre-pandemic levels, following the removal of the Government’s Covid support measures, the increase was largely from smaller companies going into liquidation.

Administrations, which are usually undertaken by larger businesses and are more complex instructions for restructuring firms, are around 35% below pre-pandemic levels. However Begbies noted the number of administrations “has begun to increase over the last year”.

Traynor added: “Overall, we remain confident of delivering upon expectations for the full year.”

Those expectations are for revenue of £117.7m-£121.4m and adjusted pre-tax profits of £19.7m-£20.6m – which would be a minimum of a 7% increase in sales and 10% uplift in earnings.

Begbies Traynor has increased its interim dividend by 9%, to 1.2p. It said it “builds on the 10% compound annual growth in the dividend since 2017 and reflects our confidence in sustaining our financial track record and the group’s financial position and prospects”.

Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “Good news for insolvency practitioner Begbies Traynor tends to be bad news for almost everyone else.

“The company is seeing momentum build across its business – most notably in the insolvency part as UK businesses struggle with weak consumer sentiment, surging costs and rising interest rates.

“Soberingly, Begbies expects to continue to do well moving forward, which suggests it can see that there are a large number of firms which are close to the brink.”