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magazineCrisis means more work for insolvency specialist Begbies
Begbies Traynor (BEG:AIM) 91p
Gain to date: 3.4%
Original entry point: Buy at 88p, 19 Dec 2020
Shares in insolvency and advisory firm Begbies Traynor (BEG:AIM) surged late last week after the firm released its latest red flag alert report.
It revealed that a record 509,000 UK businesses were in ‘significant financial distress’ at the end of last quarter, although it also cautioned that the figure could be just ‘the tip of the iceberg’ as the impact of the coronavirus spreads.
Almost all of the firms in significant distress are small and medium businesses with less than 250 employees. The report says that despite Government support measures such as the Business Loan Interruption Scheme some firms have struggled to gain access to Government-backed loans.
In its third quarter to 31 January, Begbies reported strong growth in revenue and profit, which after a strong first half left it confident of delivering results at least in line with expectations for the year as a whole.
The recovery and financial advisory business performed well due to organic growth and a positive contribution from recent acquisitions, while the property business performed in line with expectations during the quarter.
SHARES SAYS: Begbies is a rare beneficiary of the financial angst caused by coronavirus and is therefore a good portfolio hedge. Keep buying.
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