Fall in number of insolvencies has negative impact on Begbies
REGIONAL accountancy group Begbies Traynor has reported a sharp drop in interim revenues and earnings due to a 10% fall in the number of companies going bust.
The firm, which has a Birmingham operation, specialises in insolvency cases. It said revenues fell 14% to £22.3m in the six months to the end of October while pre-tax profits, adjusted for exceptionals and amortisation, were down 34% to £2.1m.
The company said “difficult market conditions persisted” with a 10% fall in UK insolvencies in the first three quarters of 2013.
During the period the firm has stripped out costs of £2.9m, more than the £2m originally planned, and acquired insolvency firm Cooper Williamson in a deal worth up to £2.5m.
Chairman Ric Traynor said: “This half year period has seen a continuation of the trends seen in the recent past, as we had expected. The continuing benign financing environment in the UK has led to further reductions in corporate insolvencies, with a consequent reduction in the group’s revenue.
“We anticipate some improvement in trading levels in the second half of the financial year, over the traditionally busier winter months, and will benefit from the contribution from the recently completed acquisition.
“With the benefit of our reduced cost base, a stable financial position and committed medium and long-term bank facilities, the group remains in a strong position to take advantage of opportunities to develop and enhance the business, both organically and through selective acquisitions.”
Net debt stands at £17.8m, down from £18.3m.
