Begbies Traynor upgrades annual outlook
Begbies Traynor raises annual earnings outlook as corporate insolvencies rise amid economic uncertainty
- Begbies Traynor’s annual revenue is expected to grow by around 11% to £122 million
- Business insolvencies in England and Wales rose to highest level in 13 years in 2022
Restructuring specialist Begbies Traynor predicts full-year results will beat expectations following a significant increase in the number of companies going bankrupt.
The AIM-listed group’s revenues are now set to grow by around 11 percent to £122 million for the year ending in April, while adjusted pre-tax profit is expected to rise by around 16 percent to £20.7 million.
Both core divisions performed well during the year, supported by a mix of organic sales growth and acquisitions.
Problem: Business insolvencies in England and Wales hit a 13-year high in 2022 as businesses grappled with skyrocketing inflation, largely driven by skyrocketing energy prices
The business recovery and financial advisory segment benefited from insolvent liquidations remaining above pre-Covid levels and an increase in administrations from typically larger companies.
In 2022, business insolvencies in England and Wales will reach their highest level in 13 years while companies struggled with skyrocketing inflation, largely caused by skyrocketing energy prices in the wake of Russia’s full-scale invasion of Ukraine.
Begbies’ appointments included the paper shop chain Paperchase and the Worcester Warriors rugby union club, which was dissolved in February after being unable to pay a £6 million tax bill.
It also worked to liquidate craft brewer Beatnikz Republic and pioneering fair trade organization Traidcraft, whose collapse followed increased competition from rivals and Covid-19 lockdowns impacting sales.
In addition to insolvency work, Begbies saw revenues increase through the acquisitions of financial broker Mantra Capital and real estate advisory firms Budworth Hardcastle and Mark Jenkinson & Co.
Rick Traynor, the group’s founder and executive chairman, said: “We have continued to develop our service offering, expanding both our financial advisory business and our real estate advisory services through profitable acquisitions, primarily funded by strong cash generation.
“Our strong financial position puts us in a good position to continue to invest in the business, both organically and through acquisitions, to further expand our scale and additional service offerings.
“We started the new year with confidence in our prospects for another year of growth. Our insolvency team will benefit from their recent insolvency appointments, along with the expected further growth in the insolvency market.”
Based in Manchester, the company is 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 the stock price closed at 132p on Monday, meaning they’re down about 9 percent since the start of the year.
“A better-than-expected trade update from corporate restrictive group Begbies Traynor is good news for its shareholders, but typically a negative sign for UK business,” noted Russ Mould, investment director at AJ Bell.