The firm said in a trading update that the market for UK corporate insolvencies remained challenging despite signs of stabilisation in the first quarter of 2011, and that there were no signs of material recovery in insolvency volumes, regardless of the financial stress afflicting businesses.
Begbies also anticipated that net debt will be lower than expectations when the firm publishes full results on July 7, as a result of strong operating cash flows in the final quarter of the financial year to April 30 2011.
Ric Traynor, executive chairman of Begbies, said: “The group’s performance has stabilised following a disappointing year.”
Begbies said it has also taken measures across the group to realign its cost base.
The company expects the exceptional costs relating to this programme to be broadly in line with the previously announced charge of £3m.
The board is also reviewing the carrying value of assets related to its tax division, including goodwill and unbilled income. The result of this review will be announced in July.
Traynor added: “We have taken action to realign the business to current levels of activity, whilst maintaining our leading market position in UK SME insolvency and retaining the capacity to take advantage of any upturn in this market.”