Begbies Traynor, the corporate recovery specialist, is on track to report a 50 per cent increase in full-year profits amid a rising tide of company insolvencies.

In its first-half trading statement, Begbies said trading in its insolvency division is “substantially ahead” of the same period last year and “well ahead” of the second half of its prior financial year.

“We have had a strong first half in our core business of insolvency and corporate recovery and our positive expectations for the year as a whole are unchanged”, said Ric Traynor, executive chairman.

With corporate insolvencies in the UK up 22 per cent in the first nine months of 2008, that activity will account for around 80 per cent of Begbies full-year revenues. However, a slump in corporate finance work has partly offset that benefit.

The company said mergers and acquisition activity “ground to a virtual halt” during the autumn, such that its corporate finance division will make a first-half operating loss of £1 million, significantly worse than previous expectations. The company has since cut staff to minimise the impact in the second half.

Analysts expect Begbies to produce a 51 per cent rise in pre-tax profits to £10.6 million in the 12 months to April 30.

Recent insolvency clients include Silverjet, the business airline, Alphasteel and Carlyle Capital Corporation. Shares in Begbies have risen 66 per cent on the year in the expectation that it will be one of the stock market’s clear winners from the economic downturn.

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