Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Insolvency fall hits profits at Begbies

by
9th Jul 2013
Save content
Have you found this content useful? Use the button above to save it to your profile.

Profits at listed insolvency specialist Begbies Traynor halved in the past year as the number of UK companies being wound up has dropped.

Begbies, which claims to be the UK's top insolvency specialist, said pre-tax profit for the year to April 30 2013 was £2.4m compared to £5.5m a year earlier. Turnover dropped 11% to £51.1m.

Ric Traynor, Begbies' chairman, said his priority has been to cut costs, restructure and reduce net debt by £10m since October 2011.

"Our new long-term debt facilities, together with the significant reduction in debt over the last 18 months, place the group in a strong financial position. This will enable us to consider making organic investments and selective acquisitions, whilst providing confidence in the underlying strength of the group, despite the challenging trading conditions."

In spite of the recent falls in insolvencies, recent figures suggest they may rise again over the next year.

Earlier this month, R3, the insolvency specialists’ trade association, reported that the number of zombie companies that can just about afford the interest payments on their loans had fallen from 146,000 to 108,000 during the past year, as more businesses slipped into insolvency. R3 said that the number of businesses struggling to pay their debts as they fell due had increased to 134,000.

“Businesses struggling to pay debts when they fall due are in a very perilous position," said Liz Bingham, president of R3. "While they have yet to enter formal insolvency procedures, businesses with such serious cash flow problems may find that the day of reckoning is not too far off.”

“There are fewer ‘zombie businesses’, but this is not necessarily because businesses that have been in this position are showing signs of improvement. Far bigger cash flow problems are occupying the thoughts of these businesses’ managers.”

Begbies, which has handled administrations for Port Vale football club and United Carpets, cut 6% of jobs in its insolvency business in 2012.
Tags:

Replies (1)

Please login or register to join the discussion.

avatar
By User deleted
10th Jul 2013 07:38

How very satisfying ...

That a company which profits from others problems has encountered issues of it's own because fewer of it's potential clients are going bust

Thanks (0)