BEGBIES Traynor, the corporate insolvency specialist, yesterday poured cold water on hopes for an early economic recovery by predicting increased workloads for its business "for several years to come".
North of the Border, the firm said it was receiving "record" levels of inquiries from firms struggling in the recession.
The Aim-listed company said its insolvency division – which accounts for nearly 80 per cent of group revenues – was expected t
o post full-year results "very substantially ahead of last year".
In a trading update for the year to 30 April, Begbies yesterday said it had continued to expand its insolvency service to "further exploit the favourable market conditions".
But Begbies cautioned that results for the year were expected to be at the lower end of market expectations as the strong insolvency service performance was weighed by a weaker performance in its other divisions.
The firm's corporate finance division – which has been hit hard in the credit crisis – made £1 million in operating losses for the first half of the year, but Begbies expects to moderate these in the second period.
Begbies said future growth prospects for its core insolvency division "remain strong" and other services would improve.
Executive chairman Ric Traynor said: "We have had a strong year in our core business of insolvency and corporate recovery whilst our other divisions are making progress in consolidating and improving their performances. Prospects for insolvency and corporate recovery remain very strong given the indicators from our red flag alert early warning system which imply an increased flow of work for several years to come."
Begbies – which has 39 offices throughout the UK – said its four branches in Scotland dealt primarily with insolvency.
Ken Pattullo, who heads up Begbies Traynor's operations in Scotland, told The Scotsman: "We're very, very busy. We're experiencing record levels of inquiries from companies and anticipate that we will be doing so for a considerable time to come."
Begbies Traynor is due to announce preliminary results for the year to 30 April on 9 July.
Ben Archer, an analyst at Charles Stanley, said: "We expect corporate insolvencies to continue to grow well into 2010, noting the average case life for Begbies is around two to three years providing a good tail of activity beyond initial appointment."
Back in January, the group announced interim profits of £28.3m for the six months to 31 October, a rise of 37 per cent compared with the same period in its previous financial year.
But interim pre-tax profit was flat at £2.1m following losses in the corporate finance division.
