Begbies Traynor has warned that insolvency activity will remain “elevated” into 2025 despite improvement in the wider economy.

The Manchester-based restructuring firm said higher interest rates and funding challenges in certain sectors will result in further companies going bust or requiring an overhaul.

The company, listed on London’s AIM junior market, reported strong revenue and earnings growth over the past year.

Group revenues increased by 12% to £136.7 million for the year to April 30.

It said this was led by 13% growth in its business recovery division as the turbulent financial backdrop and high borrowing prices put pressure on firms.

Ric Traynor, executive chairman of the group, said he expected this activity to continue in the short term.

“Insolvency activity across the UK remains at elevated levels, with sustained higher interest rates continuing to impact on corporate stress levels,” he said.

“With our extensive national coverage and reputation, we are well placed to provide the advice and support required by the business community.

“This elevated level of insolvency activity is expected to be maintained going into 2025 as the economy recovers, especially in sectors with working capital and other funding challenges in an economy moving from the recovery to growth phase.”

The group also witnessed 26% growth in its property advisory division, supported by expansion during the year.

The group has grown through a number of bolt-on acquisitions in recent years and said it has a “pipeline” of further opportunities.

Begbies Traynor reported that adjusted pre-tax profits grew by 6% to £22 million for the year.

Shares in the company were 1.9% lower at 97.5p on Tuesday morning.