Begbies Traynor Group PLC on Monday said it expects to report profit in line with market expectations for the first half of its current financial year, despite a hike in employment costs from increased national insurance contributions.

The Manchester, England-based consultancy that provides recovery, financial advisory and property services said revenue and adjusted pretax profit have increased by around 16% during the six months that ended October 31.

However, the group expects the recent increases to employer national insurance rates in the UK, as well as the lowering of the earnings threshold for employer national insurance contributions, will increase its employment costs by around £1.3 million per yea.

It was also announced in October’s autumn budget that the UK national minimum wage is set to rise again next year, which will hit wage costs even further.

‘We are reviewing options to mitigate the impact where possible’, Begbies Traynor said.

Begbies Traynor stressed that it remained ‘confident’ in delivering market expectations for the financial year due to end on April 30. It cited a company-compiled market consensus range of between £23.0 million and £24.3 million in adjusted pretax profit, which would represent between a 4.5% and 10% growth from £22.0 million last year.

Executive Chair Ric Traynor said: ‘We have made a very good start to the year with double-digit growth in revenue and profits driven by positive momentum across the group. This gives us confidence that we will deliver market expectations for the year as a whole.

‘Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.’

Shares in Begbies Traynor were up 0.4% at 94.00 pence each in London on Monday afternoon.

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