Begbies Traynor boosted by collapse of Paperchase and host of insolvencies
Restructuring specialist Begbies Traynor Group says its finances have been boosted by the collapse of Paperchase earlier this year.
Begbies Traynor was appointed as administrator after the struggling stationery chain failed to secure any buyers.
The retailer’s 106 branches could face closure after Tesco agreed to buy the brand but not its stores or workforce.
Begbies said the ongoing administration, which involves keeping the stores open and running the firm in the short term, is a “higher-value” insolvency case which has helped strengthen its financial performance.
The restructuring business said it continued to take an “encouraging level” of new insolvency appointments across all market sectors over the three months to January 31.
It also hailed a good pipeline of financial advisory appointments, and said it was confident it would meet market expectations of between £19.7 million and £20.6 million in pre-tax profit and between £117.7 million and £121.4 million in revenue for the year.
Cost pressures and weaker consumer spending have led to a raft of collapses and restructurings on the high street since the start of 2023.
Figures from the Centre for Retail Research last week showed that 14,874 jobs have been cut or announced since the start of the year.
This includes 3,185 in large retailers undergoing some form of insolvency proceedings, namely Paperchase and fashion chain M&Co, which also tumbled into administration in recent weeks.
Ric Traynor, executive chairman of Begbies, said: “We have continued to perform well across the group and our outlook for the full year remains unchanged.
“This will extend our strong financial track record of growth, through a combination of organic and acquisitive investment.”
Vivek Raja, an equity research analyst at Shore Capital Markets, said rising corporate distress levels in the UK mean the outlook for Begbies remains positive, thanks to its counter-cyclical nature.
He said: “The economic benefit to Begbies of the upward trend in midmarket administrations is expected to be reflected in the financial year to April 2024
“Begbies is the largest player in UK insolvencies with a 14% share of the overall market including 10% in midmarket administrations.”