Begbies Regulatory News (BEG)

Monday, 6 December 2010

BEGBIES TRAYNOR GROUP PLC

("the Group")

Half Year Trading Update

Begbies Traynor Group plc, the specialist professional services consultancy, today issues a trading update for the six months ended 31 October 2010. The Group will issue its half year results for the period on Thursday 16 December 2010.

Group revenue for the period is anticipated to be broadly in line with the prior year. However, insolvency revenues are approximately 9% lower, mitigated by an improved performance by the Group's non-insolvency operations. This is in line with the Group's trading update issued on 30 September, where it was stated that activity levels in the Group's insolvency division have been constrained due to market conditions. Subsequent Government insolvency statistics for the third calendar quarter of 2010 show a 7% reduction from the second quarter and an 18% reduction from the same period of the prior year.

As a result of the constrained activity levels, profitability in the period has been impacted by reduced margins in insolvency, partially offset by improved performance within the Group's non-insolvency businesses. As a consequence of this, together with an increase in finance costs resulting from the Group's new banking facilities, we expect adjusted pre-tax profits* in the first half year to be around £0.7m below last year's results of £4.3m. Following some restructuring undertaken in the period, exceptional costs of approximately £0.8m have been incurred in the half year.

The Group remains comfortably within its banking facilities of £35m with net debt (excluding asset finance) of £20.3m. Total net debt, including all sources of finance, was £24.2m at 31 October 2010.

The numbers of UK insolvencies remain lower than expected and the Group believes this fall continues to be due to the combination of lenient creditor attitudes and temporary government support initiatives. As the latter begins to unwind and public sector cuts start to impact, we expect some incremental flow in new insolvency engagements through the remainder of the financial year. This would result in an improved performance in the second half, reflecting a greater second half weighting to our results as previously indicated in our trading update in September.

* Profit before tax from continuing operations plus amortisation, finance charges arising from the discounting of deferred consideration, acquisition related costs under IFRS 3 (revised) and exceptional costs

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Information on Begbies Traynor Group can be accessed via the Group's website at www.begbies-traynorgroup.com