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Wednesday, 28 September 2011

Begbies Traynor reports trading in line with expectations

Begbies Traynor, the insolvency and restructuring specialist, said its first quarter trading has been in line with expectations.

Begbies Traynor, who are based in Manchester, make 90% of revenues from insolvency and restructuring activities, said it expects to see some margin improvements throughout the course of the year as the benefits of cost saving measures filter through.

It seems that insolvency revenues are not rising for Begbies Traynor as the insolvency market is still very flat. This is in part due to low interest rates and the continued time to pay support from HMRC.

The firm is still keen to sell its Red Flag Alert service. The Alert service is a credit risk database with 6 million records on businesses in the UK, from sole traders through to limited and quoted companies. It reports quarterly on how many companies are facing "critical", or "significant" financial problems. The last report on Q2 showed a fall of 48% in the numbers of companies with "significant" financial problems compared to Q2 and year on year only an increase of 1%. However, those with "critical" financial problems increased by 12%. Without knowing the exact amounts of "critical" and "significant" distressed companies it is hard to make comparisons.

It is our view that the market will remain flat for the foreseeable future and when the recovery comes in ernest we will see the expected rise in insolvencies, as the weaker companies lose business to stronger rivals and run out of cash.

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