Friday, August 12, 2022

Corporate insolvencies continue to rise

The chair of the Midlands branch of insolvency and restructuring trade body R3 is urging directors of the region’s businesses to seek professional advice if they are concerned about cash flow, as corporate insolvency figures continue to rise compared to the same time last year.

Latest figures published by the government’s Insolvency Service show that while the number of companies entering insolvency decreased by 8.9% in May – to a total of 1,817 compared to April’s total of 1,995 – there was an increase of 79.2% compared to May 2021’s figure of 1,014.

R3 Midlands chair Eddie Williams, a partner at PwC in the East Midlands, said: “The monthly fall in corporate insolvencies has been driven mainly by a reduction in Creditors’ Voluntary Liquidations. However, numbers for this process and for overall corporate insolvencies are considerably higher compared to this time last year, as well as to May 2020 and to May 2019.

“This suggests that although the current economic challenges are continuing to hit businesses hard and are pushing a significant number into insolvency, insolvency trends are still uneven.

“In recent months, firms have been buffeted by rising costs, falling consumer confidence and reluctance to spend on anything other than the essentials, which has meant that they haven’t made the additional income they needed to offset increased expenditure.

“There has been no time to draw breath between the issues caused by the pandemic and those arising from our current economic challenges, and many businesses who have survived so far are now starting to struggle. Rising interest rates will add extra costs for firms to overcome.

“The Government’s insolvency figures should be a timely prompt for any company director whose business is struggling. Objective advice should be sought from a qualified, professional source to decide the best path forward – and the earlier this is done, the better.

“Most R3 members will give an hour’s free consultation to potential clients to enable them to understand more about the circumstances of the business, and to outline the options available to help them improve the situation.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.