More UK companies will crash into administration following the tax hikes announced in Labour’s Budget at the end of October, according to Begbies Traynor.
Announcing its half-year results to the London Stock Exchange, the Manchester-headquartered group said “UK insolvencies remain at elevated levels” and that it expects “continuing growth” in its business recovery division as companies “face continuing demand pressures and cost challenges”.
Begbies Traynor said firms are being hit by the recent rise in costs announced in the Budget as well as “the prospect of higher-for-longer interest rates”.
In recent weeks household names such as Homebase and Typhoo Tea have entered administration.
In the aftermath of announcing its half-year results, shares in Begbies Traynor rose by five per cent in early trading.
For the six months to 31 October, 2024, the group reported a revenue of £76.3m, up from £65.9m, while its pre-tax profit increased from £3m to £4.7m.
‘UK insolvencies remain at elevated levels’
On its outlook, Begbies Traynor said: “The group’s financial performance in the first six months underpins the board’s confidence in delivering current market expectations for the full year, which will extend our strong financial track record of growth.
“Market conditions remain supportive for the group’s service lines and this is reflected in good activity levels and positive momentum across the business.
“UK insolvencies remain at elevated levels. We anticipate continuing growth in business recovery, our largest service line, as businesses face continuing demand pressures and cost challenges, including the recent rise in costs following the Budget and the prospect of higher-for-longer interest rates.
“With our expanded team, we have the capacity and breadth of expertise to provide the advice and support required by our clients in such circumstances.
“We continue to invest and develop our advisory team, which has a healthy pipeline of engagements.
“Our property advisory teams have ongoing positive momentum and are well-placed to maintain their strong financial performance from the first half year across our three key areas of asset sales, consultancy and valuations.
“Our broad range of services, diversified client base, organic growth initiatives and pipeline of acquisition opportunities, leaves us confident of continuing to build upon our strong track record of growth in the current year and beyond.”