East Midlands agricultural businesses are outperforming their regional counterparts as new research reveals that they have one of the lowest levels of elevated insolvency risk in the UK.
November figures compiled by insolvency and restructuring trade body R3’s Midlands branch, using Bureau Van Dijk’s Fame database, show that one in three – 33.3% – are at higher than normal risk of insolvency, which is one of the lowest statistics for the sector in the UK. Only London, the North East and the East of England have lower percentages.
Wales has the highest percentage at 45.3%, which is over nine points above the UK average of 36.2%.
In contrast, the news is less positive for many of the other key sectors monitored across the region by R3. The East Midlands tech and IT sector, for example, has the second highest proportion of operators at above average risk when compared with other UK regions. Almost half – 47% – have an elevated risk of insolvency, which is over two percentage points above the UK average of 44.8%. Only the South East has more tech and IT businesses at elevated risk of insolvency, with 47.3%.
R3’s research also indicates that 37.5% of East Midlands hotels currently have an elevated insolvency risk, which is over five percentage points above the UK average of 32%. The picture is similar for the region’s tourism operators, with 38.6% at heightened risk of insolvency compared to the UK average of 35.7%, a gap of around three percentage points.
Commenting on the research, R3 Midlands Chair Eddie Williams, a partner at Grant Thornton in the East Midlands, said: “It is encouraging to see local agricultural businesses outperforming their national competition but the regional picture overall is no cause for celebration. We have to be realistic that the East Midlands, and the UK as a whole, continues to face some strong economic challenges.
“Uncertainty and stop-start stockpiling are among the factors hitting local investment and wider business health, and members of the insolvency and restructuring profession report anecdotally that they are seeing increasing numbers of companies worrying about their cashflow levels and order books.
“Company directors who are concerned about their business or the market conditions they are operating in should seek advice from a knowledgeable and qualified professional source. The earlier they do, the more options they will have in terms of business rescue.”