Lack of deals hits Begbies
Insolvency expert Begbies Traynor has revealed it has not been immune to the economic woes that have led to mounting numbers of corporate insolvencies.
The Manchester-based firm, which has an office in Newcastle, said trading at its corporate finance arm had been ``significantly" worse than previous expectations amid the credit crisis. It is pencilling in operating losses of around £1m for the division in the six months to October 31.
But booming business in its insolvency and corporate recovery business helped offset the loss and the group’s annual outcome remains on track, according to Begbies.
Its insolvency practice now accounts for around 80% of group revenues as corporate victims of the economic turmoil pile up each week.
Begbies has been recruiting staff and making acquisitions to deal with the increasing number of stricken companies.
The number of corporate failures rose at its fastest rate for 18 years between July and September, the latest official figures showed last month.
Well-known high street names such as Woolworths and MFI have called in administrators in the last two weeks, with homewares chain The Pier adding to the list yesterday.
Insolvency experts are among the few beneficiaries of the economic downturn, although the losses at Begbies’s corporate finance arm showed that few have escaped unscathed.
It has reduced its head count in the division as it battles against a ``sudden, rapid and unexpected change in outlook".
The collapse of US investment bank Lehman Brothers in September sparked a vicious second phase of the credit crisis, which saw corporate finance activity grind to a ``virtual halt", said Begbies.
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