Widening gloom boosts Begbies
ACCOUNTANCY firm Begbies Traynor has seen its turnover grow by more than a third thanks to booming insolvency and tax departments.
But the collapse of the deals market hit Begbies’ corporate finance arm, denting the firm’s profits.
Like-for-like pre-tax profit for the six months to October 31 stayed level at £2.1m. The like-for-like adjusted figure, before amortisation and exceptional costs, was up 31% at £3.3m. Turnover for the period rose 37% to £28.3m.
Begbies, which has its headquarters in Manchester and offices across the North, saw revenues rise by 31% at its insolvency department, the firm’s traditional focus.
The widening economic gloom meant the department made an extra £5.4m compared with the same period last year and it took on an extra 34 fee earners during the period.
Revenue from the group’s tax and forensic investigations departments also saw a sharp rise, up to £5.3m compared with £1.7m, driven mainly by acquisitions.
But this revenue growth was “partially offset” by the corporate finance division where income dropped to £500,000 from £1.7m and a loss of £1m was incurred.
Begbies said it had been hit by unprecedented financial and credit market conditions in which the corporate finance market “ground to a halt”. Some 13 of the division’s 38 staff have been cut but the firm said it remained committed to the sector.
Executive chairman Ric Traynor said: “Begbies Traynor Group has delivered a solid financial performance in the half-year, with strong growth in the core insolvency and restructuring division.
“With the continuing strong performance in the insolvency division, actions in place to mitigate the corporate finance losses and the anticipated second half weighting in the tax practice, the board expects that the group’s continuing activities will perform in line with expectations for the year as whole.”
During the period Begbies continued to beef up its corporate insolvency department with more acquisitions, but it disposed of its consumer insolvency business.
It said it was on a sound financial footing following the £12.5m share placing in September. The group has net borrowings of £14.8m.
Begbies will pay an interim dividend of 1.1p.
