The unwinding of pandemic-related support schemes comes at a tricky time for UK plc, with newly published Insolvency Service figures showing a 79 per cent year-on-year increase in company insolvencies in May, the 13th successive month in which insolvency rates ticked up.
Little wonder that listed insolvency practitioners have outperformed. Shares in Begbies Traynor (BEG) and FRP Advisory (FRP) are up 10 per cent in the year to date. The latter floated in March 2020 just as markets were reacting to the threat of Covid-19, although fiscal stimulus measures meant investors’ worst fears never materialised.
FRP sold £80mn of shares through its IPO, with selling shareholders (the firm’s partners) pocketing £60mn and the company raising £20mn in new money to fund acquisitions. It has since done five deals, increasing headcount and strengthening a corporate finance arm that should help to make earnings less cyclical.