Yorkshire tech firms stabilise but insolvency risk remains high

Minimal signs of recovery were noted across Yorkshire’s technology sector in the last month, yet the latest data reveals that insolvency risk levels remain high.

According to insolvency and restructuring trade body R3, the number of tech firms in the region deemed to be at above average risk of insolvency rose by less than 1% in July.

However, 50.3% of technology and IT firms face a serious risk of insolvency in the coming 12 months, equating to more than 6,000 businesses.

The sector is facing threats nationwide though, as the risk figure for the sector stands at 49% across the UK – making it one of the most threatened industries.

There was widespread variation by region too, as 44.7% of London’s technology firms were deemed to be at above average risk, while that figure rose to 52.9% for firms in the South East.

R3’s analysis uses Bureau van Dijk’s database and provides a risk figure for the coming year based on available company information such as available assets, finance sheets and director track records.

Eleanor Temple, R3’s Yorkshire chair, explained that tech firms tend to have a higher risk profile given their innovative nature and welcomed the slowdown in risk levels.

She added that 2017 represented a “tough year” for technology firms but that slowing insolvency risk levels showcase some improvements in the sector.

Between July and August, the number of businesses deemed to be in the negative band of the risk tracker jumped by just over 2%.

This means that 44.4% of active firms in Yorkshire are deemed to be at above average risk of insolvency, slightly above the nationwide figure for all sectors of 42.3%.

Businesses facing up to financial issues should undertake options reviews in order to ascertain what solution may work best.

Refinancing or restructuring may provide long‐term stability, while insolvency procedures could be the only viable route forward.

By Phil Smith




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