A quarter of East Mids restaurants flirting with insolvency, says R3
Nearly one in four East Midlands restaurants is in danger of slipping into insolvency, according to new figures from an industry body.
R3 says that almost one-in-four (24.1%) local operators has an above average risk of insolvency – the highest percentage of any region in the UK.
The finding is part of insolvency and restructuring body R3’s monthly sector tracking report – compiled using Bureau Van Dijk’s Fame database – which also reveals an uncertain outlook for some East Midlands transport and haulage businesses.
Over one-in-three (36.5%) of these companies in the East Midlands currently has a higher than normal risk of insolvency, which is one of the highest ratios in the UK. Only the West Midlands has a greater proportion of transport and haulage businesses with an increased risk of insolvency.
R3 points out that there is positive news for the region, however, as the research reveals that the East Midlands agriculture sector is the UK’s top regional performer, with only around one-in-seven (14.5%) businesses operating with an above average risk of insolvency.
The region’s construction sector is among the top three most financially secure in the UK – outperformed only by the West Midlands and Northern Ireland – with fewer than one-in-five (23.6%) at higher than average risk of insolvency.
R3 Midlands Chairman chris Radford, a partner at the Nottingham office of Gateley plc, said: “These statistics paint a mixed commercial picture for the region. The situation won’t necessarily be helped by predictions of economic growth by leading forecasters, as businesses are now facing the effects of rising inflation hitting households and the uncertainty surrounding Brexit.
“R3 advises that the monitoring of finances should remain a priority for business owners as they seek to weather all eventualities. If cash flow becomes a major challenge, it is imperative to seek professional advice sooner rather than later. Never be tempted to stick your head in the sand.”
