East Mids agriculture firms outperform UK counterparts, says report
East Midlands agriculture companies are continuing to outperform the majority of their regional counterparts, as new research reveals that they are among the most financially stable in the UK.
May figures compiled by insolvency and restructuring body R3’s Midlands branch, using Bureau Van Dijk’s Fame database, show that around one-in-three – 31.7% – agriculture companies in the region are at higher than normal risk of insolvency. This is one of the lowest percentages in the UK and equates to 707 local businesses.
Only the North East, Northern Ireland and the East of England have lower proportions of agriculture companies at elevated risk of insolvency at 28.6%, 28.8% and 31.3% respectively. Wales has the highest percentage at 44.7%, which is almost ten points above the UK average of 35%.
In contrast, the news is less positive for the East Midlands retail sector, which has a higher proportion of businesses at above average risk than many of its regional counterparts. Around two-in-five – 38.4% – are at above normal risk of insolvency, representing 4,714 local retailers. This is almost three percentage points more than the UK average of 35.7%, but under the South West, North East and Yorkshire statistics of 40.8%, 39.3% and 38.6% respectively.
The May research also indicates that over two-in-five East Midlands companies – 41% – currently have an elevated insolvency risk, which equates to 84,824 local businesses. In May 2017, the proportion was around one-in-four, or 26.2%, representing 52,144 companies.
R3 Midlands chair Chris Radford, a partner at the Nottingham office of Gateley, said: “It is good to see the local agriculture sector outperforming many of its peers, but even with this glimmer of positivity, it is obvious that all business sectors are facing strong challenges to their success.
“The woes of the retail sector have been widely reported of late, particularly with several High Street names entering a statutory insolvency procedure this year. Poor trading in the first quarter of 2018 has contributed to the sector’s downturn, particularly as ever-thriftier consumers move their spending from retail to leisure.
“It is vital that retailers refrain from sticking their heads in the sand and recognise that such trends can be systemic. For example, the rise of online shopping and the subsequent need for a seamless and slick e-shop is, for many businesses, as inescapable as it is potentially profitable.
“There are few retailers who won’t need to take a strategic look at how and where they do business and the type of customers they are targeting. There is no doubt that things are tough in the marketplace, but planning ahead and speaking to a regulated and reputable adviser could make all the difference.”
