Trading Update/Acquisition

Begbies Traynor Group PLC
15 November 2005




RNS Release

15th  November 2005

                           Begbies Traynor Group plc

                           Pre-Close Trading Update

                                      and

                        Acquisition of W3 Debt Solutions


The Board of Begbies Traynor Group plc ('BTG' or 'the Group') (AIM: BEG), the
UK's largest independent firm of business rescue and restructuring specialists,
is pleased to provide an update on current trading in advance of interim results
for the six months to 31 October 2005, which will be released on 16 January
2006.


BTG has made good progress and remains on track to deliver growth in line with
current market expectations and the Group's plan to double its share of the
accessible corporate recovery market to 10% by the end of 2007. Despite the
recent apparent upswing in the volumes of personal insolvencies, the corporate
market remains stable at the levels consistently seen over the recent past.
Therefore, delivery of planned growth continues to be mainly driven by
acquisitions.


The integration of the Group's largest acquisition to date, that of insolvency
specialists Taylor, Gotham and Fry (TGF) in August, is proceeding well with
pleasing progress made in merging this business with our existing South Eastern
regional operation.   Acquiring TGF marked an important strategic development
for the Group, adding an extra level of presence in the South East. This is a
region of key economic importance and one we see offering significant organic
growth opportunities for all of BTG's insolvency and corporate recovery
services.


Also progressing to plan is the integration of MCF, the Leeds-based corporate
finance operation acquired in May 2005, that specialises in advice and
transactions in the mid-corporate market. We have begun the process of expanding
this activity into the other major cities in which the Group operates.


A longer-term Group strategic goal is to offer an increasing number of services
closely related to insolvency and corporate turnaround.  FDB International, the
commercial investigation and security agency acquired by BTG in June, has yet to
develop its potential from membership of the Group. It is receiving additional
senior management input to ensure greater value is produced from the Group's
investment over time.


Acquisition of W3 Debt Solutions LLP


BTG is now entering the rapidly-expanding volume personal insolvency market
through the acquisition of W3 Debt Solutions LLP.  W3 Debt Solutions began
trading in September 2003, and today employs around 15 full-time staff from its
office in Chorley, Lancashire.  W3 Debt Solutions reported turnover of £1.1m in
the year to 31st May 2005, producing profits before tax of £350,000.


W3 Debt Solutions specialises in providing advice and practical support to
individuals in debt.   Assisting people in debt is one of the fastest-growing
sectors of the overall insolvency market, which according to the latest DTI
figures has grown 46% from Q3 2004 to Q3 2005.  This strong rate of growth has
been partly fuelled by changes introduced under the Enterprise Act that make it
simpler for individuals and companies to invoke formal insolvency procedures.
Growth has also resulted from the easy availability of cheap credit which has
led to rising numbers of individuals borrowing beyond their means.



In response to the emergent demand, the Board of BTG resolved to enter the
volume personal insolvency market as an ancilliary service stream, operating
under a different brand that is distinguished from BTG's existing corporate
insolvency and turnaround services.



The terms of the transaction are as follows:



BTG has acquired Insolvency Advice Limited, (which was owned and controlled by
Ric Traynor and Andrew Dick, Executive Directors of BTG) which owned 51% of W3
Debt Solutions for £1.36m satisfied by the issue of 1,133,333 new ordinary
shares in BTG to Ric Traynor and Andrew Dick.  In addition, an earn-out
consideration is payable (also in shares in BTG to be issued at the time of
measurement) based on 6.75 times the increase in taxed earnings of W3 Debt
Solutions in the year to 31 October 2006.



Immediately after being acquired by BTG, Insolvency Advice Limited acquired a
further 25% interest in W3 Debt Solutions from Greg Mullarkey (its chief
executive), leaving him with a minority interest of 24% of the goodwill value of
the business.  Greg receives an initial consideration comprising 276,732 shares
in BTG and a cash payment of £334,000. Greg is also entitled to a deferred
consideration of £333,000 in cash, subject to abatement at £10 for every £1 that
the taxed profits of W3 Debt Solutions for the year ending 31 October 2006 fall
short of £235,000.



Greg has also been granted a put option, whereby his remaining 24% minority
interest can be sold to BTG.  The consideration will be based on profits for the
year ended 31st October 2008.  If Greg exercises this put option he will receive
a consideration which equates to 24% of seven times post tax profits for that
year, subject to a cap of £5m.



As disclosed above, pre-tax profits for the year ended 31st May 2005, based on
unaudited accounts were £350,000, before partnership drawings. This equates to
£230,000 after allowing for the basic remuneration for Greg as an ongoing member
of the LLP.  The business currently has some 900 Individual Voluntary
Arrangements under management and is adding over 45 new cases per month.



The value of net tangible assets acquired with the business is estimated at
£400,000, which is represented by partners capital accounts. Insolvency Advice
Limited will replace the proportion of Greg Mullarkey's capital account that is
to be repaid to him following the transaction of approximately £100,000.



Going forward, the Directors anticipate that the growth of W3 Debt Solutions
will be enhanced by internal referrals from the existing Group network of
offices and contacts.  The acquisition of W3 Debt Solutions is anticipated to
have a modest positive impact on earnings in the current year and the benefits
are expected to be more significant in 2006/07.



The Directors, other than Ric Traynor and Andrew Dick, consider, having
consulted with BTG's advisers Shore Capital & Corporate, that the terms of the
transaction are fair and reasonable insofar as BTG shareholders are concerned.



New share issues



Mark Fry and Jamie Taylor, two partners  who joined BTG following the TGF
acquisition in August, have each subscribed, in cash,  for 275,417 new BTG
ordinary shares at 120p per share.  These shares were issued by the Group under
its existing authority. In addition, Mark and Jamie have each acquired 141,250
shares from other senior members of the BTG Group.



BTG has also bought-in the 25% minority interest in its South West business from
Ian Walker, who remains with the Group, for £150,000 in cash plus the issue of
41,782 shares in BTG.



Following the issue of these additional new ordinary shares and the addition of
the shares being issued in consideration of W3 Debt Solutions, the Group will
have a total of 74,212,056 ordinary shares in issue.  The new ordinary shares
are expected to trade on AIM on 18th  November 2005.



Ric Traynor and Andrew Dick's shareholdings in the Group (including family
interests), following the acquisition and other share issues are 30,916,960
shares (41.7%) and 12,266,781 shares (16.5%) respectively. Their combined
percentage holding in BTG of 58.2% remains unaltered as a result of the above
transactions overall.



Ric Traynor, Executive Chairman of Begbies Traynor Group, comments:



'I am pleased with the Group performance in the first half of the year, with
revenues  and profits growing according to our business plan.  We are
particularly pleased to have successfully completed five acquisitions in 2005,
and we continue to pursue other opportunities to bring profitable firms into the
Group.



Mark Fry and Jamie Taylor have reconfirmed their commitment to the Group, after
joining us in August, by investing £1m in BTG equity, both through subscription
for new shares and facilitating modest planned disposals by a number of partners
whose initial holdings are now out of their lock-in period.



We have watched closely the personal insolvency market, and waited for the
appropriate moment to progress the acquisition of W3 Debt Solutions.  To be
profitable servicing the volume personal insolvency market requires a different
set of skills and processes compared to those required for larger scale
corporate work.  We are delighted that we can now address this fast-growing
market under the W3 Debt Solutions brand as part of the BTG group and are
extremely pleased to welcome Greg and his team.'



Enquiries, please contact:



Ric Traynor                                       Neil Boom/Rosemary Acfield
Executive Chairman                                Gresham PR Ltd.
Begbies Traynor Group plc                         020 7404 9000
0161 839 0900



Mike Sawbridge
Shore Capital & Corporate Limited
0151 600 3722


Notes to Editors


About Begbies Traynor Group plc



The Group specialises in business insolvency management and is becoming
increasingly active in the area of personal insolvency. It also offers services
in corporate rescue and forensic investigation and has entered the field of
corporate finance through the acquisition of MCF Corporate Finance. In addition,
the Group recently acquired FDB International, an established commercial
investigation and security agency.

The Group has grown to its current network of 30 nationwide offices ranging from
Scotland to the South West of England, with over 300 operatives. The Company
continues  to pursue its strategy of organic development, coupled with the
acquisition of specialist knowledge of both individuals and firms, to further
increase its market share in its core services.

The Directors believe that the Group is the UK's largest independent insolvency,
corporate rescue and recovery specialist with clients ranging from major
institutions to individuals with business difficulties.


The Office Network

The Group operates with 60 licensed insolvency appointment takers, some 220 fee
earning staff and 65 in support and administration. The Group operates from 30
locations of which five are regional offices, a further twelve are full offices
and thirteen are satellites.

Business Activities

The core business of the Group is the formal administration of insolvencies
including receiverships, liquidations, administrations, company voluntary
arrangements and business-related personal insolvencies. The Group has extended
its activities into a range of consultancy services including corporate rescue,
credit management, forensic and investigation services and corporate finance.


                      This information is provided by RNS
            The company news service from the London Stock Exchange