"Challenging market" hits Begbies profits

ACQUISITIONS have taken their toll on the pre-tax profits of business recovery consultancy Begbies Traynor.

In the six months to October 31, profit fell to £0.6m from £1.5m for the same period in 2014, although revenue was 25% up at £25.5m (HY 2014: £20.8m).

In its insolvency and restructuring division, the company reported a “challenging market” with a 10% reduction in the number of UK corporate insolvencies.

However, the company said a focus on cost management had mitigated the effects of the difficult conditions and the company said it remains the leading corporate appointment taker and has increased its market share.

But it was the acquisition of The P&A Partnership on September 30, Eddisons on December 17 2014 and of Taylors Business Surveyors and Valuers, subsequent to the period, which dented profits.

Begbies Traynor Group chairman Ric Traynor said: “I am pleased to report a solid financial performance in the period with results in line with our expectations.

“The group has delivered growth in revenue and adjusted profit before tax, together with a strong cash performance, in addition to strengthening the business through acquisitions in both of our divisions, one subsequent to the period end.

“With no indications of a change to the benign financing environment in the UK which would cause an increase in insolvency levels, we remain cautious about activity levels in the insolvency division in the near term and will continue to focus on managing costs accordingly.

“The Eddisons business has continued to perform in line with expectations and the remainder of the financial year will benefit from the acquisition of the Taylors business.

“Overall, our expectations for the year as a whole remain unchanged. We will continue to look for opportunities to develop and enhance the group, both organically and through selective acquisitions. We will provide an update on third quarter trading in early March 2016.”

Adjusted and diluted earnings per share rose from 1.6p to 1.8p and the interim dividend remained at 0.6p.