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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.<br /><br />The accountancy firm reported a profit of &pound;7.2m for the year to 30 April, and said that activity levels since are &ldquo;significantly ahead&rdquo; of the same period last year.<br /><br />Begbies&rsquo; chief executive Ric Traynor said that revenues had increased by 29 per cent to &pound;62.1m as a result of &ldquo;significant growth&rdquo; in its core insolvency administration business, which accounts for 80 per cent of the group&rsquo;s revenue.<br /><br />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.<br /><br />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.<br /><br />&ldquo;When the technical recession ends in the third quarter or towards the end of this year, we expect (insolvency) numbers to continue to increase,&rdquo; Traynor said.<br /><br />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.