Budget will keep insolvency advisers busy, says Begbies Traynor

The number of businesses falling into financial difficulty is likely to remain elevated over the coming months as a result of the budget, one of Britain’s go-to corporate restructuring firms has claimed.
Begbies Traynor said that the chancellor’s decision to increase employers’ national insurance contributions was likely to cost it about £1.25 million a year, although it thinks it might end up being a net beneficiary of the budget changes.
Its bosses expect that some companies will struggle to cope with the increase in costs they are now facing, which will keep Begbies’ restructuring experts busy.
“Additional headwinds for UK business from increased employment costs and the prospect of higher-for-longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals,” Ric Traynor, executive chairman, said.
Begbies Traynor employs a thousand or so people in its offices around the UK. Insolvency is what it is best known for and it is the group’s largest service line, but it also has teams of accountants, chartered surveyors, bankers and lawyers who advise businesses on subjects including forensic accounting investigations, commercial property valuations and restructurings.
During the pandemic, the insolvency and administration market was relatively slow as struggling businesses were kept afloat by generous government support schemes. The rapid rise in interest rates and cooling of the global economy over the past 18 months or so, however, has increased Begbies’ workload.
Worcester Warriors rugby club and the stationer Paperchase are two administrations that the company has worked on over the past year, but it has also handled the receivership of Britishvolt’s electric battery site in Northumberland.
Begbies has been adding more insolvency specialists to its business recovery team to help it to take advantage of the “continued favourable market conditions”.
Between May and October, the first half of its current financial year, Begbies’ revenue and profit before tax increased by 16 per cent compared with the same period of last year to about £77 million and £11.5 million respectively. Traynor, 64, said that the six months of trading had been a “very good start”, with the increase in revenue and profits “driven by positive momentum across the group”.
The board said it was “confident of delivering market expectations” for its current year and investors and analysts are hoping for an adjusted pre-tax profit of about £23.7 million. Last year Begbies turned an adjusted pre-tax profit of £22 million. If it hits its target this year, it will be the eleventh year in a row that it has grown the bottom line.
“Insolvency volumes are at elevated levels compared to the pre-Covid zero interest rate environment,” Jamie Murray, an industry analyst at Shore Capital, said. “We expect this to be sustained for longer, given the impact the budget will have on UK businesses. This should be beneficial for Begbies’ business recovery and advisory business.”
H trimmed his profit forecasts for 2026 and 2027 by 5 per cent, however, given the additional national insurance contributions that Begbies will have to start paying from next April. Begbies shares edged down ½p, or 0.6 per cent, to 93p on Monday morning, valuing the business at £150 million.