North West insolvencies fall by nearly a third over second quarter
The number of companies entering into administration in the North West fell by nearly a third during the second quarter of the year, despite a number of high profile insolvencies hitting the headlines recently.
New analysis from professional services firm KPMG of notices in the London Gazette shows that a total of 51 companies went into administration between April and June 2019, compared with 74 in the previous quarter – a fall of 31%.
Nevertheless, activity across the quarter was broadly on a par with the 53 companies that went into administration during the same period last year.
The infrastructure sector, including businesses from across construction, property and logistics, was the most common source of insolvencies in the North West and accounted for a third of cases (17).
Just over a quarter of the companies going into administration (13) were from consumer markets, which covers retail, food and drink.
The national picture is similar with insolvencies across the country falling by nearly a sixth (14%) from 361 to 310 over the same period.
While there were some major high street names such as Bathstore and Select that entered into insolvency, the number of UK retailers going into administration remained relatively flat, falling from 28 in Q1 2019 to 26 in Q2.
It was a similar trend for restaurants, pubs and clubs, which collectively saw 14 administrations over the quarter, including those of the Jamie Oliver Restaurant Group and the Red’s True Barbecue chain. This compared with 12 seen in Q1 2019.
However, there was a slightly more pronounced increase in the number of operators across the wider food and drink sector entering into administration over the quarter – up from 13 in Q1 to 18 in Q2.
Significant insolvencies in this space included the administration of the Welsh cheesemaker, GRH Food Company Limited; that of the luxury chocolatier Rococo Chocolates; and the North East-based craft brewer, Mordue Brewery.
Rick Harrison, restructuring partner at KPMG in the North West, said: “You could be forgiven for thinking there had been a dramatic increase in corporate insolvencies since the turn of the year, but the truth is that numbers in the North West and across the UK have tracked downwards over the last three months.
“Prolonged uncertainty around Brexit has perhaps further delayed a ‘moment of truth’ for companies in those sectors which are more vulnerable to economic volatility.
“Locally, we’ve seen these challenges surfacing in logistics, construction and consumer markets which are under particular pressure across their supply chains.
“That said, we have seen a number of companies in the retail and casual dining sectors put forward CVA proposals as part of wider restructuring programmes which aim to put them on a more stable financial footing and head off the prospect of an administration.”