Insolvency index report brings mixed news for UK businesses
The latest business insolvency index produced by Experian has highlighted some surprising results in terms of the amount of company insolvencies recorded in the UK last year.
2012 saw a slight fall in the number of companies who were forced into insolvency compared to the previous year.
In regional terms, North West England, the West Midlands and Wales saw the biggest improvement in terms of the insolvency rate.
A numbers game
There wasn’t good news for everyone though. Perhaps the most interesting aspect of the report was the fact that there was a clear disparity between the insolvency cases recorded on behalf of larger companies compared to smaller operations.
Firms with between 51-100 employees enjoyed an improvement in the number of recorded insolvencies, with the figure falling from 2.22% in 2011 to 1.83% in 2012.
In contrast, the situation was quite different for companies with more than 500 employees. These companies actually saw an increase in the rate of insolvencies, with the figure rising from 1.46% in 2011 to 1.61% in 2012.
These figures certainly suggest that it is the larger companies who are continuing to feel the sharpest effects of the stuttering UK economy. It is our view, however that smaller companies are also suffering real difficulties as trading conditions continue to be difficult. Many business owners are simply 'closing the doors' some what distoring statistics.
HMV stand out as an obvious recent example of a major company that has considerably more than 500 employees and has been forced to accept the reality of the current financial climate.
Businesses may have felt that the worst of the downturn was now behind them. However, these results suggest that a number of companies could simply be caught in the eye of a wider-reaching financial storm.
Underperforming businesses worried about their financial situation can benefit from seeking advice sooner rather than later. A restructuring and insolvency specialist can assist business leaders, financial directors and stakeholders to deliver pro-active solutions for their business, as well as advice on how to adapt to the ever-changing economic landscape.
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.