Begbies Traynor (AIM:BEG) expects the recent Autumn Budget rise in National Insurance rates and the predicted slowdown in Bank of England rate cuts to boost business at its core insolvency arm.
“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," said executive chairman Ric Traynor.
The business had already made “a very good start to the year with double-digit growth in revenue and profits driven by positive momentum across the group,” he added.
One downside of Rachel Reeves' Budget for the company is that its NI bill will rise by £1.25 million a year, with the consultant looking at how it can mitigate this.
Revenue in the six months to end October 2024 rose by 16% helped by both organic and acquisitions, said the trading update.
Cash flow improved by 8% over the half year, it added, with net debt of £3.8 million after £4.1 million of earn-out payments.
Begbies added it was “confident of delivering market expectations for the full year to 30 April 2025, which would extend our ten-year financial track record of profitably growing the business.”
Current market forecasts are for adjusted profits of between £23-24.3 million.