Begbies disappoints as corporate failures decline

6th Dec 2010 13:23

A lack of insolvencies means that first half underlying profit will be £700,000 lower for Begbies Traynor. The number of insolvencies ahs been declining. Banks appear to be holding off from placing companies in administration or other insolvency measures - they are probably waiting for the economy to get stronger before pulling the plug. AIM-quoted Begbies expects things to start changing in the second half, which will make the full year figures second half weighted. The insolvency practitioner says that insolvency revenues are 9% lower in the six months to October 2010 and that was only partly offset by growth elsewhere. Insolvency margins have fallen and interest costs are higher after the recent debt refinancing. Underlying pre-tax profit is expected to decline from £4.3m to £3.6m. There are also restructuring costs of £800,000. Net debt was £24.2m at the end of October 2010. FinnCap has reduced its profit forecast for the year to April 2011 by £500,000 to £9.7m. Interim figures will be published on 16 December.