Begbie Traynor, one of Britain’s leading corporate restructuring firms, expects a rise in the number of companies facing financial distress in the coming months due to recent budget changes.
The company expects the Chancellor’s decision to increase employers’ National Insurance contributions to exacerbate cost pressures on businesses already suffering from economic headwinds.
While the National Insurance increase will cost Begbie Traynor around £1.25m a year, the company believes it could ultimately benefit from growing demand for insolvency and restructuring services. Executive Chairman Rick Traynor said: “Additional headwinds facing UK businesses as a result of increased employment costs and the possibility of higher interest rates for a longer period are likely to extend the period of high insolvency levels, increasing the need for specialist advice and support.” In the area of insolvency and our business recovery.
Begbies Traynor employs around 1,000 staff across the UK and is known for its insolvency expertise but also provides a range of professional services including accounting, chartered surveying, banking and legal advice. The company assists companies with forensic accounting investigations, commercial real estate valuations and corporate restructuring.
During the pandemic, government support schemes have kept many struggling businesses afloat, resulting in a slower period for insolvencies and administration. However, the past 18 months have seen Begbie-Traynor’s workload rise due to rising interest rates and a slowing global economy. Notable managements taken over by the company over the past year include Worcester Warriors rugby club and stationery retailer Paperchase. It also managed the receivership of Britishvolt’s electric battery site in Northumberland.
To meet growing demand, Begbie Traynor has expanded its team of insolvency professionals. In the first half of the current financial year, from May to October, the company’s revenues and pre-tax profits rose by 16% compared to the same period last year, to around £77m and £11.5m respectively. Trainor noted that the six months represented a “very good start”, with growth driven by “positive momentum across the group”.
The board expressed confidence in meeting market expectations for the full year, with analysts forecasting adjusted pre-tax profits of around £23.7m. This will mark the eleventh consecutive year of earnings growth for the company.
Industry analysts are also optimistic. Jamie Murray of Shore Capital commented: “Insolvency volumes are at elevated levels compared to the pre-Covid zero interest rate environment. We expect this to continue for longer, given the impact of the Budget on UK businesses. This should be beneficial for Begbies’ business recovery and business Consulting.
However, Murray revised down his 2026 and 2027 profit forecasts by 5%, citing the additional National Insurance contributions the company will have to pay from next April. On Monday morning, Begbies Traynor shares fell 0.6% to 93p, valuing the company at £150m.
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