Insolvency specialist Begbies Traynor Group warned yesterday that its full year results would be below market expectations thanks to the declining rate of company failures.
According to Begbies, the number of UK corporate insolvencies in the first quarter of 2015 were 4,014, a 11.3 per cent decline against the same period last year, and was the lowest level of quarterly appointments since the fourth quarter of 2007.
Overall UK corporate insolvency appointments for the year to 31 March, the period which most closely matched Begbies' financial year, stood at 16,380, which compared with 18,994 a year ago - a 14 per cent year-on-year reduction.
According to the group, it had maintained its market-leading position by the number of appointments, and had continued to strengthen its position through the strategy of selected bolt-on insolvency acquisitions.
However, that had only partially mitigated the impact of a declining market.
It said the board now anticipated that the performance for the full year would be below market expectations.
According to the board, it continually looked to manage the group's cost base to reflect the lower levels of overall market activity.
Ric Traynor, executive chairman said, while it was disappointing to have seen a further decline in the overall insolvency market in the UK, the company had maintained its market-leading position and had taken action to align its cost base to current activity levels.
The company had attempted to diversify in a bid to diversify from corporate distress with the acquisition of the property consultancy Eddisons in December. It had also cut costs, but did not expect to feel the full benefits this year.
According to Begbies' Red Flag report concerns over the general election had contributed to a 4 per cent increase in the number of firms in its "critical" category of corporate trouble, pointing to the possibility of an increased workload in the coming months.
According to analysts at wealth management brokerage Canaccord Genuity, Begbies was expected to post operating profits of £ 5 million for the year, as the benign operating environment for corporate and the low-interest rate environment continued to keep insolvency levels depressed, The Telegraph reported.
It said it expected Begbies to continue to gain market share despite a difficult revenue environment.