Begbies Traynor struggling to cash in on recession

Begbies Traynor, the insolvency practitioners, is seeing weak demand as low finance costs help keep UK companies from going bust.

In a trading update on its third quarter ending January 31st, the company says profits are in line with the comparable period of 2010 without providing specific figures. Begbies adds though that "the outcome for the year will be dependent on performance in the final quarter, historically a busy trading period."

The insolvency division is described as posting improved profits and margin on the back of cost savings. However, today's update notes that "activity levels in the UK insolvency market remain subdued, due in part to the continuation of the benign financing environment of low interest rates".

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The group is shedding jobs to keep costs low, with the headcount down 501 at the end of April 2011 to 470 at the end of January.

The Global Risk Partners division has struggled to replace large contracts that have come to an end and is expected to post a small loss in the second half of this year.

Shares in Begbies Traynor had fallen 0.7% by 09:00. Over the last 12 months the stock has dropped 30%.

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