Begbies Traynor upgrades annual outlook

Restructuring specialist Begbies Traynor is forecasting annual results to surpass expectations following a significant rise in companies becoming insolvent.

Revenues at the AIM-listed group are now set to expand by around 11 per cent to £122million for the year ending April, while adjusted pre-tax profits are predicted to increase by about 16 per cent to £20.7million.

Both core divisions performed well during the year, supported by a mix of organic revenue growth and acquisitions. 

Its business recovery and financial advisory segment benefited from the volume of insolvent liquidations remaining above pre-Covid levels and a rise in administrations of typically larger companies.

Corporate insolvencies across England and Wales hit a 13-year high in 2022 as firms struggled with soaring inflation, largely caused by skyrocketing energy prices in the wake of Russia’s full-scale invasion of Ukraine.

Begbies’ appointments included high street stationery chain Paperchase and rugby union side Worcester Warriors, which was disbanded in February due to an inability to pay a £6million tax bill.

It also worked on the liquidation of craft brewer Beatnikz Republic and trailblazing fairtrade organisation Traidcraft, whose collapse followed intensified competition from rivals and lockdowns impacting sales.

In addition to insolvency work, Begbies saw revenues boosted by the takeovers of financial broker Mantra Capital, and property consultancies Budworth Hardcastle and Mark Jenkinson & Co.

Rick Traynor, the group’s founder and executive chairman, said: ‘We have further developed our range of services, extending both our financial advisory business and property advisory services through earnings accretive acquisitions principally funded by strong cash generation.

‘Our strong financial position leaves us well placed to continue to invest in the business, both organically and through acquisitions, to continue building our scale and range of complementary services.

‘We have started the new year confident in our outlook for a further year of growth. Our insolvency team will benefit from their recent insolvency appointments, together with anticipated further growth in the insolvency market.’

Based in Manchester, the firm has been known for working on the administration of British football clubs, such as Wrexham AFC, Wigan Athletic, Huddersfield, Port Vale and Crawley Town. 

Begbies Traynor shares were 2.3 per cent up at 135p on Monday morning, although they have flatlined over the past 12 months.

‘A better-than-expected trading update from corporate restricting group Begbies Traynor is good news for its shareholders, but typically a negative sign for the state of UK business,’ remarked Russ Mould, investment director at AJ Bell.