Latest news with #RicTraynor
The Independent
3 days ago
- Business
- The Independent
Almost 50,000 firms near collapse amid strain from tax hike, report claims
Nearly 50,000 UK companies are on the verge of collapse, with the retail and hospitality sectors facing the most severe impact from rising wage costs. A new report highlights that recent budget measures are placing "immense strain" on small firms across the country. The latest red flag alert from Begbies Traynor reveals a significant 21.4 per cent year-on-year increase in businesses experiencing critical financial distress, reaching 49,309 in the second quarter. Consumer-facing industries have been particularly hard hit, with bars and restaurants seeing a 41.7 per cent surge in distress. Travel and tourism firms recorded a 39 per cent leap, while general retailers experienced a 17.8 per cent jump. Begbies warned that many independent pubs may not possess the necessary scale to withstand these mounting pressures for another year without urgent action. Ric Traynor, executive chairman of Begbies Traynor, said: 'The sharp rise in critical distress underscores just how tough the economic environment is for UK businesses and it's abundantly clear that tens of thousands of firms are struggling to stay afloat. 'Small and medium sized businesses across the UK are being put under immense strain by the recent increases to employer's NI as well as the increase to the national minimum wage. 'With limited financial headroom to absorb rising costs, many businesses are now reaching a tipping point.' It is the latest sign of the toll taken on many firms by the Government's move in last autumn's budget to increase national insurance contributions (NICs) and hike the minimum wage, both taking effect in April. Labour-intense companies in particular have felt the impact, such as retailers and restaurants and bars. Troubles in the sector have been compounded by a pull back in consumer spending, according to Begbies. Julie Palmer, a partner at Begbies Traynor, said: ' Households are still grappling with their finances, and this is keeping consumer confidence volatile. 'The knock-on effect of this is clear to see in the consumer-facing sectors where margins are thin, growth is hard to come by, and the impact of higher employee costs is pushing many businesses to the brink of collapse. 'So, it is of no surprise to me that while larger pub groups might be performing well, by squeezing out extra efficiencies to counteract onerous price rises, many independent players won't have the scale to withstand the pressures of this environment for another 12 months if nothing improves.' The British Beer and Pub Association (BBPA) recently estimated that 378 pubs will close this year across England, Wales and Scotland, which it said would amount to more than 5,600 direct job losses. The wider economy is also showing signs of strain, with recent official figures revealing gross domestic product shrank by 0.1% in May, following a 0.3% drop in April. 'With no end in sight to the current economic malaise, I fear the financial burdens companies are enduring at present are simply too high for many not to avoid collapse,' said Ms Palmer.
The Independent
3 days ago
- Business
- The Independent
Almost 50,000 firms near collapse amid ‘immense strain' from tax hike
Nearly 50,000 UK companies are on the brink of collapse with retailers and hospitality firms among the hardest hit as rising wage costs due to budget measures put small firms under 'immense strain', according to a report. The latest Begbies Traynor red flag alert found that firms in critical financial distress rose by more than a fifth – 21.4% – year-on-year to 49,309 in the second quarter. Consumer-facing industries saw some of the most 'extreme' rises in critical financial distress, with a 41.7% surge among bars and restaurants, a 39% leap for travel and tourism and 17.8% jump for general retailers. Begbies warned that many independent pubs will not have the scale to withstand the pressures for another year without action. Ric Traynor, executive chairman of Begbies Traynor, said: 'The sharp rise in critical distress underscores just how tough the economic environment is for UK businesses and it's abundantly clear that tens of thousands of firms are struggling to stay afloat. 'Small and medium sized businesses across the UK are being put under immense strain by the recent increases to employer's NI as well as the increase to the national minimum wage. 'With limited financial headroom to absorb rising costs, many businesses are now reaching a tipping point.' It is the latest sign of the toll taken on many firms by the Government's move in last autumn's budget to increase national insurance contributions (NICs) and hike the minimum wage, both taking effect in April. Labour-intense companies in particular have felt the impact, such as retailers and restaurants and bars. Troubles in the sector have been compounded by a pull back in consumer spending, according to Begbies. Julie Palmer, a partner at Begbies Traynor, said: ' Households are still grappling with their finances, and this is keeping consumer confidence volatile. 'The knock-on effect of this is clear to see in the consumer-facing sectors where margins are thin, growth is hard to come by, and the impact of higher employee costs is pushing many businesses to the brink of collapse. 'So, it is of no surprise to me that while larger pub groups might be performing well, by squeezing out extra efficiencies to counteract onerous price rises, many independent players won't have the scale to withstand the pressures of this environment for another 12 months if nothing improves.' The British Beer and Pub Association (BBPA) recently estimated that 378 pubs will close this year across England, Wales and Scotland, which it said would amount to more than 5,600 direct job losses. The wider economy is also showing signs of strain, with recent official figures revealing gross domestic product shrank by 0.1% in May, following a 0.3% drop in April. 'With no end in sight to the current economic malaise, I fear the financial burdens companies are enduring at present are simply too high for many not to avoid collapse,' said Ms Palmer.
Daily Mail
12-07-2025
- Business
- Daily Mail
Even my firm is a target for predators, says top corporate undertaker
Britain's largest corporate undertaker has become the latest firm to find itself besieged by offers to hold takeover talks as its boss said the London stock market has become a 'hunting ground' for private equity sharks. Begbies Traynor, based in Manchester, is the UK's largest provider of insolvency and restructuring advice. It is often the one called in when a firm is on the verge of going bust. Business has been booming as Britain has struggled post-pandemic, with Labour's tax policies piling even more pressure on companies. The economy was dealt another blow on Friday when data revealed that UK GDP unexpectedly shrank by 0.1 per cent in May. Its strong performance means Begbies has now drawn the eye of the same private equity firms buying its London-listed peers, many of whom are being scooped up because they are considered more valuable than their share prices would suggest. Ric Traynor, the firm's executive chairman, told The Mail on Sunday that it was increasingly being approached about potential deals. 'A month doesn't go by where there isn't somebody suggesting a conversation, it's either private equity themselves or some market maker in the middle,' he said. Traynor stressed that while the company was not actively seeking out a private equity deal, he did not rule out doing so in the future. 'Until a couple of years ago, the stock market was working well for us. If we have another couple of years and it still isn't working for us, that's when you start to think about whether you can get proper value for shareholders by staying on the market, or if there is a better alternative,' he said. While shares in Begbies have risen nearly 35 per cent over the past five years, they are still 15 per cent below their most recent peak of £1.48, which was recorded in late 2022 and is well below the record high of £2.04 reached in May 2006. 'We've seen firms get bought for premiums of 50 per cent or even 100 per cent of their current market value on [London's junior stock market AIM]... it is a hunting ground for private equity,' Traynor said. He added that as the business often worked closely with private equity firms when the companies they owned got into financial difficulty, conversations about a potential deal 'could easily be initiated if we wanted to'. The comments came following a strong performance for Begbies, which has seen its profits and share price rise as a slowdown in the UK economy has fuelled demand for its services. Last week, its shares hit their highest level in nearly two years after its full-year profits almost doubled as more companies were hit by higher costs in the wake of Chancellor Rachel Reeves's decision to raise National Insurance Contributions and the minimum wage in her Autumn Budget. Private equity's courting of London-listed companies is piling further pressure on the UK's beleaguered stock market, which has suffered a series of high-profile takeover deals in recent years as well as several defections to overseas markets, particularly the US. Last month, FTSE 250 firm Spectris, which makes high-precision testing equipment and software, was scooped up by US private equity firm Advent International in a £4.4 billion deal. Another mid-cap group, property investor Warehouse REIT, is also set to be snapped up following a £489 million swoop from private equity giant Blackstone on Friday, snubbing a rival bid from its London-listed rival, Tritax Big Box REIT.
Daily Mail
08-07-2025
- Business
- Daily Mail
Labour's tax raid will cause more firms to go bust, says boss of insolvency giant Begbies Traynor
The boss of one of Britain's biggest insolvency firms has predicted more companies will go bust under the weight of Labour's tax raid, as the economy flounders. Ric Traynor, executive chairman of Begbies Traynor, told the Mail that UK firms, particularly in retail and hospitality, were 'still struggling' as the Manchester-based group saw annual profits almost double on the back of surging demand. Traynor said rising costs and an ever-growing tax burden continued to be the main reason firms were collapsing. He highlighted that the number of insolvencies had 'jumped up' in May after Chancellor Rachel Reeves' tax increases took effect the previous month. 'We've seen those smaller businesses that don't have the resources just go under,' Traynor said. 'There's no reason for us to believe this will change.' The comments came after Begbies reported a profit of £11.5million for the year to April, almost double the £5.8million generated in 2024 after revenues surged 12p per cent to £154million.
The Independent
08-07-2025
- Business
- The Independent
Begbies Traynor boosted by rise in larger scale company failures
Insolvency specialist Begbies Traynor has notched up 10 years of growth in a row as profits nearly doubled amid a surge in larger scale company failures. The group said it was seeing trading in its business recovery and advisory division – which accounts for 55% of group revenues – boosted by larger and higher value insolvencies. This helped the firm's business recovery arm deliver a 5% rise in revenues to £83.7 million over the year to April 30 despite a slight fall in the number of corporate insolvencies more widely across the UK. Official figures showed there were 23,969 corporate insolvency appointments in the year to April 30, down from 25,408 the previous year. The total number of administrations – typically involving larger and more complex instructions – also edged lower in the year to 1,549 from 1,663 previously. But Begbies said its insolvency order book had increased to £78.6 million from £71.9 million a year ago. It saw annual pre-tax profits almost double to £11.5 million from £5.8 million the year before as revenues jumped 12% to £153.7 million. Begbies added that revenues over the new financial year are forecast at the upper end of expectations, which will help offset rising costs and higher wage bills from April's national insurance contribution tax hike. It said profits for the year ahead remain on track with expectations. Executive chairman Ric Traynor said: 'We have started the new year with encouraging activity levels and positive momentum across the group. 'We anticipate continuing growth in the new financial year, driven by the increase in scale of our teams, including the recruitment of senior fee earners, together with the visibility of fees on current instructions, larger and higher value cases, and supportive market conditions. 'We currently expect revenue will be at the upper end of the range of market expectations, mitigating increasing costs… and resulting in a further year of profit growth in line with expectations as we continue to invest in growing the business.'
