UPDATE 2-Begbies profit falls but credit crisis boosts outlook

(Adds detail, further company, analyst comment, updates shares)

Rhys Jones

LONDON, July 9 (Reuters) - British insolvency firm Begbies Traynor Group Plc (BEG.L: Quote, Profile, Research) reported a one-third fall in annual pretax profit but was confident of meeting 2009 forecasts as the credit crisis looked set to boost future earnings.

The business rescue and asset recovery company on Wednesday posted pretax profit from continuing operations of 5.7 million pounds ($11.3 million) compared with 8.5 million last year on revenues 14 percent higher at 48.1 million pounds, driven by solid sales growth across the group.

A poll of analysts by Reuters Estimates predicts Begbies will deliver 2009 pretax profit of 9.9 million pounds. The group said it was optimistic about the future as its corporate insolvency division has performed well over the past six months, winning contracts with the likes of Silverjet, Alphasteel and Carlyle Capital.

"We've seen analyst forecasts for pretax and we're not uncomfortable with those," Ric Traynor, Begbies' Executive Chairman told Reuters. "We're looking at double digit growth since the end of April and we can see that growing as the year goes on."

At 1020 GMT shares in Begbies were trading 4.1 percent lower at 161-1/2 pence, valuing the company at around 137.5 million pounds. The stock had risen earlier this week to 179p, its highest since March last year.

"The levels of insolvency have increased in recent months but there may have been concerns over the amount of time available for this to feed into the company's 2008 results," said Shore Capital analyst Phil Carroll.

Begbies, which typically does well when smaller businesses are doing badly, said that after the quietest period for insolvency in 20 years, the market indicators continue to predict stronger demand for its services.