Begbies Traynor shares rise as profits grow on the back of bankruptcy boom
INSOLVENCY specialist Begbies Traynor said yesterday that its full year pre-tax profit had risen 28 per cent as it benefited from the boom in businesses going bust, sending its shares higher.
The accountancy firm reported a profit of £7.2m for the year to 30 April, and said that activity levels since are “significantly ahead” of the same period last year.
Begbies’ chief executive Ric Traynor said that revenues had increased by 29 per cent to £62.1m as a result of “significant growth” in its core insolvency administration business, which accounts for 80 per cent of the group’s revenue.
He added that he expects to see more firms going through insolvency procedures than normal for several years after the country comes out of the recession.
Traynor, who co-founded the business in 1989, said historical precedents show insolvencies lag the end of a formal recession for at least a couple of years.
“When the technical recession ends in the third quarter or towards the end of this year, we expect (insolvency) numbers to continue to increase,” Traynor said.
The firm proposed a final dividend of 1.7p per share, up 13 per cent, giving a total dividend of 2.8p, an increase of 12 per cent year-on-year. Shares in Begbies closed down 1.5 per cent at 99.5p.