Begbies Traynor has posted a pre-tax loss of £700,000 for the 12 months to April 30 2015 – a period in which corporate insolvencies have fallen sharply.
The loss from continuing operations follows a profit of £4.3m for the previous 12 months, when insolvency practitioners were taking on more formal insolvency appointments.
Revenue at Begbies, however, increased to £45.4m from £44.1m the year before.
Begbies said the figures in its results are stated from “continuing operations” following the closure of its loss-making global risk partners division. The firm also streamlined its cost base and office network, resulting in exceptional costs.
The business experienced exceptional and acquisition-related items of £2.9m (2014: £0.8m) in the reporting year.
A results statement from the firm also stated that the results reflected a 14 per cent reduction in the number of UK corporate insolvencies in the year to March 31 2015.
In this context Begbies restructured its insolvency division in response to lower levels of market activity, incurring exceptional costs.
Ric Traynor, executive chairman, said: “It was another challenging year for the insolvency industry with national volumes at their lowest level since 2007, impacting our insolvency caseload.”
Describing a year of significant changes, he said the business acquired the Eddisons property consultancy in December 2014, made two bolt-on insolvency acquisitions, managed the cost base in its insolvency division and closed the loss-making global risk partners division.
He added: “The combination of the reduced cost base in the insolvency division, the removal of losses from the discontinued business and the full year impact of the Eddisons acquisition, leaves the group well placed in the new financial year.
“We will look for opportunities to develop the business both organically and through selective acquisitions.”
The group is now focussed on two complementary operating divisions: Begbies Traynor, the insolvency, restructuring and investigations consultancy; and Eddisons, the property valuation and property management consultancy.
Traynor said there has also been a change in the means of generating SME insolvency cases in recent years, with the increasing use of internet-based rather than traditional marketing techniques.
Begbies invested in this area initially through the acquisition of Cooper Williamson in October 2013 and have continued to invest in these marketing initiatives.
But Traynor added: “These factors have impacted on the business and as a result we have streamlined our cost base and office network in the year.”
By Marcel LeGouais