Begbies Traynor profits held back by low insolvency rates

Shares in business services consultancy Begbies Traynor slumped even as the company swung to a full year pre-tax profit of £0.6m from a loss of £0.7m as revenues rose to £50.1m from £45.4m, although lower insolvency rates impacted on both figures.

Adjusted pre-tax profits were up to £4.5m from £3.6m. The total dividend is held at 2.2p a share.

Executive chairman Ric Traynor the results were in line with market expectations.

He added that the growth in both revenue and profits “reflected the benefit of the investment in our property services division, which now represents 25% of the group's activities”.

“The integration of (surveyors) Eddisons into the group has been completed and synergy savings have exceeded our original expectations”.

"In contrast, the insolvency market has continued to be challenging over the last twelve months, with a further reduction in the number of UK insolvencies, compounding the falls seen in previous years. The number of UK insolvencies is at the lowest level since 2004. These conditions have led to lower revenue and profit in our insolvency division; however, we have broadly maintained our operating margins through continued cost control."

"Although we remain cautious about activity levels in our counter-cyclical activities in both business recovery and property services in the near term, the recent acquisition of the Pugh auction business, together with the Taylors valuation business, gives the opportunity for growth in earnings in the new financial year.”

Shares in Begbies Traynor were down 11.3% to 47.88p at 1248 BST.