Begbies rues drag from low interest rates

Low interest rates might have saved the economy from complete depression and be a source of comfort for hard pressed families paying mortgages, but at least one firm regards them with something close to irritation.

That would be Begbies Traynor, the insolvency specialist that reckons it would have had far more business if borrowing costs were closer to normal.

Executive chairman Ric Traynor said today: "There is a lot of financial stress out there. If it wasn't for low interest rates the number of insolvencies would have been twice what they are."
He was talking as Begbies unveiled half year results. Revenues slipped a little to £29.4 million, but profits edged up by £300,000 to £3.4 million.

The company has issued a couple of profit warnings this year, having geared up for much more business than it actually got.

It has since cut costs, offloading its tax arm and reducing staff numbers by about 10%.

Said Traynor, a 30% shareholder, "Eighteen months ago we were anticipating much higher levels of business. We have had to accept a bit of a quieter market place."

That could change next year. "I think it is increasingly likely that we are heading into a double dip recession," added Traynor.

An interim dividend of 0.6p will be paid, half of last year's effort. The AIM listed shares slipped 1.5p to 25p. That leaves the company valued at £22.43 million.