Sharp rise in North West insolvencies
The number of North West companies entering administration leapt by more than two thirds (68%) during the third quarter of the year, according to new analysis from KPMG.
The business advisory firm’s quarterly analysis of business insolvency shows that 86 North West companies went into administration between July and September 2019, compared with 51 in the previous quarter.
When contrasted with the same period last year the number of business administrations increased by three fifths (60%) making it the busiest period of 2019 for insolvencies. In the year to date, 211 North West businesses have entered administration.
High profile cases in the third quarter across the region included the administration of Late Rooms and Polyfilm.
Rick Harrison, restructuring partner at KPMG in Manchester, said: “For some time now corporate insolvencies have been ticking along at fairly steady levels, so the more marked increase in administrations seen last quarter may herald the start of a new wave of activity.
“This is perhaps unsurprising, given the challenges presented by fragile consumer confidence, rising overheads from fluctuations in exchange rates, increasing employment costs and political uncertainty across the region.
“The good news is that companies across all industries are now proactively addressing long-term issues and are attempting to place themselves on a more sure financial footing, ahead of any further macro-economic challenges that are coming down the line.
“From CVA proposals for retailers, to refinancing in other sectors, there are definitely options out there, and they seem to be paying off for those firms that have opted to take a fiscally cautious approach.”
On a national level, more than a third (35%) of companies entered administration during the third quarter of the year, totalling 417. When compared with the same period in 2018, the figure increased by 30% from 322 businesses.
Notable cases included the administrations of Late Rooms and Super Break, Ferguson Marine Engineering and Eversmart Energy.
The insolvency of Thomas Cook is not included in this quarter’s figures as the group is in compulsory liquidation, rather than administration.
Despite the headline-grabbing insolvencies of high street names including Jack Wills, Karen Millen and Forever 21, the number of retailers going into administration continued to fall over the quarter, from 26 in the second quarter 2019 to 18 in quarter three.
However, it was a less positive picture in the building and construction sector, which saw a marked increase in administrations – up from 49 in Q2 to 76 in Q3 2019, including that of Cheshire-based Pochin’s, while the property sector also saw an uptick in insolvencies with numbers rising from 18 to 33 over the quarter.
Pubs, restaurants and clubs also continued to feel the effects of fragile consumer confidence, with an increase in administrations from 14 to 26.
