Begbies Traynor has warned company insolvencies are set to rise in the second half of the year when the Government ends a host of pandemic supports, reports my colleague Simon Foy.
The insolvency specialist said it will be boosted by an “increase in market activity levels”, but added that it does not anticipate a “tsunami of insolvencies to suddenly appear” when ministers end emergency business support.
Executive chairman Ric Traynor said: “We’re not expecting a tidal wave of insolvencies to suddenly appear, but undoubtedly there will be an element of catchup among those businesses which didn’t go into formal process over the course of the last year.
“There will also be those businesses which entered the pandemic in an adequate financial position but are now carrying a lot of debt that they may not be able to deal with.”
The Aim-listed firm said the increased activity will occur over the next couple of years, with the highest number of insolvencies likely to take place in the retail, hospitality and construction sectors.
It came as the company posted a 35pc decline in pre-tax profits to £1.9m, despite revenues jumping nearly a fifth to £83.8m.
Its performance was driven by four acquisitions it completed since the beginning of the year and improved trading.
Earlier this year, Begbies Traynor bought independent insolvency practitioners CVR Global and David Rubin & Partners, “which has materially increased our scale in the key London market and brought our first offshore offices”, the company said.
The board declared a dividend of 3p per share, an increase of 7pc on last year. Shares fell 0.6pc to 129.4p, valuing the company at £196.4m.