There is an item in The Times this morning (Tuesday 11 July) captioned by a photo of Ric Traynor with a warm smile emitting from his crinkled mouth. It turns out he has double-digit reasons to feel happy; reports today say that Begbies Traynor has delivered an 11 per cent rise in revenue from £110 million to £121.8 million as the increased number of corporate insolvencies over the past 18 months have found their way to the bottom line of many of the firms in our glorious sector.
Begbies have been focused on insolvencies in mid-sized companies, but group has also benefited from a “significant increase” in higher-value cases. Adjusted profit before tax rose by 16 per cent from £17.8 million to £20.7 million. The group’s share price was down by 1.49 per cent or 2p to 132.5p in morning trading. The company rewarded shareholders with an increase to its dividend for the sixth year in a row. The board raised the total dividend for the year by 9 per cent from 3.5p to 3.8p.
With the sun out and golf courses in Portugal looking ever more inviting, there is no better time than to either own or be a shareholder in a big insolvency and restructuring practice. How Neil now regrets selling a 95 per cent stake in a little company called Coopers & Lybrand in 1946.
The NTI newsroom reported in one of our recent bulletins that Insolvency Service numbers demonstrate that corporate insolvencies in May rose by 40 per cent to 2,552. Construction and retail were some of the hardest-hit sectors and Ric and his cohort of acquisitive directors are looking to the future, saying the group’s balance sheet and cashflow would be able to support continued growth through further investments in the company and through acquisitions.
He would have been saddened, but a little delighted to read this morning that UK wages rose at a record pace in the three months to May, increasing expectations that the Bank of England will increase interest rates further. Average pay rose by a larger-than-expected 7.3 per cent over the period, data from the Office for National Statistics showed. Economists had forecast a dip to 7.1 per cent from 7.2 per cent last month.
Of course we all want to pay our people what they are worth, but when it pushes already teetering companies over the brink and into the safety net held aloft by insolvency professionals it can cause a little crinkle to the side of the mouth.