Fewer firms on the critical list, says Begbies

THE number of North West businesses facing financial difficulties increased in the third quarter of 2014, on an annual basis, but fewer companies were on the “critical” list.

Begbies Traynor’s Red Flag report tracks the numbers of businesses facing financial problems and classifies them as either “significant” or “critical”.

Significant is defined as a court action pending or poor or out-of-date accounts while firms are described as critical when they have County Court judgements totalling £5,000 or more, a winding-up petition or are in a voluntary arrangement.

There was a marginal decline in firms facing significant distress, down by 66 to 22,499 from the second quarter. But the number of cases was up by 5% on the third quarter in 2013. The number of critical cases fell by 5% quarter-on-quarter to 314, and this number was also down by 5% on the same period last year.

Begbies partner Gary Lee said: “The North West has had a very strong third quarter, with many sectors across the region reporting a drop in the number of businesses facing significant or critical financial difficulties.

“One of the main contributing factors is that business confidence across the region has increased, leading to many companies seizing new opportunities for growth and expansion. This is especially apparent in leisure and tourism where the number of business experiencing significant difficulties fell for the second consecutive quarter.

“Manchester has performed better than other areas in the region, an indication that the recovery is starting to take effect in the large regional cities, and will eventually filter through to other regional areas as it strengthens.”

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