Begbies Traynor, one of Britain’s leading corporate restructuring firms, anticipates a rise in the number of businesses facing financial distress in the coming months due to the recent budget changes.
The company expects that the Chancellor’s decision to increase employers’ National Insurance contributions will exacerbate cost pressures on businesses already grappling with economic headwinds.
While the increased National Insurance will cost Begbies Traynor approximately £1.25 million annually, the firm believes it may ultimately benefit from the heightened demand for its insolvency and restructuring services. Executive chairman Ric Traynor stated, “Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.”
Employing around 1,000 staff across the UK, Begbies Traynor is best known for its insolvency expertise but also offers a range of professional services including accounting, chartered surveying, banking, and legal advice. The firm assists businesses with forensic accounting investigations, commercial property valuations, and corporate restructurings.
During the pandemic, government support schemes kept many struggling businesses afloat, resulting in a slower period for insolvency and administration cases. However, the past 18 months have seen a surge in Begbies Traynor’s workload due to rising interest rates and a cooling global economy. Notable administrations handled by the firm over the past year include Worcester Warriors rugby club and the stationery retailer Paperchase. It also managed the receivership of Britishvolt’s electric battery site in Northumberland.
To meet increasing demand, Begbies Traynor has expanded its team of insolvency specialists. In the first half of its current financial year, from May to October, the company’s revenue and pre-tax profit rose by 16% compared to the same period last year, reaching approximately £77 million and £11.5 million, respectively. Traynor remarked 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 an adjusted pre-tax profit of around £23.7 million. This would mark the eleventh consecutive year of profit growth for the firm.
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 be sustained for longer, given the impact the budget will have on UK businesses. This should be beneficial for Begbies’ business recovery and advisory business.”
However, Murray adjusted his profit forecasts for 2026 and 2027 downward by 5%, citing the additional National Insurance contributions the firm will have to pay from next April. On Monday morning, Begbies Traynor’s shares edged down by 0.6% to 93p, valuing the company at £150 million.
