Manchester-based corporate rescue giant Begbies Traynor Group plc on Thursday published an update on trading for its financial year ended April 30, 2020, saying revenue is expected to be about £70 million, up from £60.1 million in 2019.
The firm said adjusted profit before tax is expected to be about £9.2 million compared to £7 million in the previous year “having absorbed a £0.6m impact of the lockdown in the last six weeks of our financial year.”
On its business recovery and financial advisory business, Begbies Traynor said: “We have seen a strong performance in the year with profit growth of c.30%, which reflects the continuing development of the division, increased insolvency appointments with higher average fee levels, a strong performance from our advisory team, and contributions from current and prior year acquisitions.
“Insolvency appointments increased through the year prior to any economic impact from the COVID-19 outbreak, which has significantly increased the level of distress in the UK economy.
“We continue to take the largest number of corporate insolvency appointments in the UK and our advisory team performed well in the year with an increase in corporate finance transaction completions.
“The teams have successfully worked remotely since the commencement of the lockdown, continuing to provide advice and support to clients whilst progressing cases and realising assets, resulting in strong cash generation in the final quarter.
“Our recent investments in IT, particularly in document management, have greatly assisted our remote working capability.”
On dividends, Begbies Traynor said: “The board remains committed to its long-term progressive dividend policy and the interim dividend for the financial year was paid on 11 May 2020 as previously announced.
“It is the board’s current intention to recommend a final dividend and a decision will be made, as usual, at the time of the results announcement in the summer.”
On its outlook, the firm said: “The board remains positive about the group’s prospects.
“In the current economic environment, we expect that our mix of service lines and counter-cyclical focus places the group in a strong position.
“Whilst the timing of a return to normal economic conditions remains unknown, which impacts on several of our property service lines, we do anticipate progressive increases in the number of insolvencies.
“However, the timing and volume of these may be influenced by the current short-term Government support measures.
“Overall, at this early stage of the new financial year, it is not possible to assess the potential impact of COVID-19 on our new financial year ending 30 April 2021.
“We will provide a further update at the time of our final results announcement, which we anticipate will be in mid to late July.”
Begbies Traynor Group executive chairman Ric Traynor said: “The group has delivered a strong financial performance with increased revenue and profitability, despite the disruption in the last few weeks of the financial year.
“This is credit to our partners and staff in these challenging and uncertain times, where they have adapted rapidly to remote working.
“Looking ahead we remain well placed, given our strong financial position, the likely impact of the COVID-19 pandemic on the UK economy and the counter-cyclical focus of our business.”