Q3 corporate administrations rise on same period last year

CORPORATE administrations in the Midlands have increased by 25% year on year, according to new figures.

The Q3 data, compiled by Baker Tilly shows 96 appointments in the three-month period, compared to 77 in the same period last year.

Baker Tilly said the figures showed that regional administrations overall were not reflective of the national picture which, over the same periods, have remained static.

Nationally there were 596 administration appointments in England in Q3 2011, exactly the same number as in Q3 2010, highlighting a continued stagnation in England’s overall economy and the continuing trend for businesses to merely survive assisted by the low costs of borrowing.

The Midlands Q3 figures also show a 21.5% increase on the 79 appointments made in the previous quarter.

Guy Mander, partner at Baker Tilly Restructuring and Recovery, said: “The insolvency figures demonstrate that businesses continue to have little room for manoeuvre either with growth or profit.

“Therefore, for companies already struggling with cash issues, it is even more vital to tackle any potential issues in advance. Traditional credit lending continues to be less available, and HMRC is demonstrating signs of being more aggressive in its actions with defaulting creditors.”

He said for most businesses, flexibility in their financial planning would be essential to their survival.

Looking at alternatives to traditional bank lending such as Asset Based Lenders and Private Equity could provide new opportunities and, for the right businesses, additional working capital should allow them to find a way through the stagnant economic phase, he added.

Almost 30% (29%) of the national administration appointments, below, related to companies in the construction and property sectors, which continue to be hit hard by the low growth economy. Retail and wholesale companies represented 15% of appointments. The most recent rent quarter day did not bring about the high profile failures that some were expecting. However, with the high street now heading for the all important Christmas period, retailers will be hoping for, and reliant on, a surge of consumer spending that the festive season usually brings.