Begbies Traynor also expects a continued high number of bankruptcies next year

The restructuring company’s turnover rose 12% to £136.7m for the year ended April

Begbies Traynor predicts a continued ‘increased’ number of bankruptcies as rising interest rates and financing needs put pressure on corporate finances.

The Aim-listed restructuring specialist expects continued problems in the business community next year after a 12% increase in the number of bankruptcies to 25,391 as of April 30.

Begbies Traynor’s turnover rose 12% from £121.8 million to £136.7 million for the year ended April 30. Adjusted earnings before interest, tax, depreciation and amortization rose 7%, from £26.6 million to £28.5 million, while pre-tax profit fell 3.3% to £5.8 million.

Ric Traynor, (pictured) executive chairman of Begbies Traynor, said: “Insolvency activity in the UK remains at high levels, with persistently higher interest rates continuing to impact corporate stress levels.”

Traynor added that higher insolvency rates are expected to continue next year as companies face “working capital and other financing challenges” during the economic recovery.

The Body Shop, Cazoo, Ted Baker and Matchesfashion are among the companies that have fallen prey to insolvency this year due to the challenging higher rates environment. The Bank of England has raised the key interest rate to a 16-year peak of 5.25% to combat inflation. Although interest rates are expected to fall this year, companies will still face higher borrowing costs.

Begbies Traynor’s revenues from its business recovery business increased by 13%, from £70.6 million to £79.5 million, while revenues from its consultancy services fell by 2.2%, from £19.1 million to £16.9 million. million.

The company handled several significant insolvency matters during the financial year, including the administrations of Worcester Rugby Club and Paperchase, as well as the receivership of Britishvolt’s electric battery factory in Northumberland. In addition, Begbies Traynor has been appointed to lead the administrations of Fortress Capital and Thought Fashion.

Tim SymesPartner and insolvency and asset recovery lawyer at a British law firm Stewarts echoed Traynor’s comments, saying: “It is right to say that things will continue to be difficult for the smaller and less resilient businesses, which represent the vast majority of ongoing business failures. However, we will continue to see these numbers decline as interest rates begin to fall, control over inflation is fully regained and consumer confidence returns.”