Administrations fall in the second quarter
Despite high profile insolvencies continuing to hit the headlines, the total number of companies in Northern England entering administration during the second quarter of 2018 fell sharply, by nearly a fifth.
A study by KPMG of notices in the London Gazette shows that a total of 92 Northern companies went into administration between April and June 2018, compared with 113 in the previous quarter – a fall of 19% – and 108 in the corresponding period in 2017.
National figures also showed a fall in administrations during the second quarter of this year, falling 13% from 347 to 302 companies. However, this represented a modest increase on the 297 administrations seen during the second quarter of 2017.
Howard Smith, associate partner at KPMG in Leeds, said: “The drop in the number of administrations may come as a surprise to many who have followed the tribulations of certain well-known high street brands.
“We continue to see companies in the casual dining and retail spaces battling hard in the face of changing consumer attitudes towards spending, coupled with increased costs as a result of the living wage and business rates pressures. Whilst a number of chains have survived through the implementation of successful CVAs or via pre-pack administrations, inevitably there have been site closures and job losses across many parts of the country, in addition to many suppliers going unpaid. The much-publicised pressures on the construction sector also continue to impact businesses up and down the supply chain, both large and small.
“On top of this, we’re seeing new sectors start to come under more acute pressure – for instance, high street estate agents are presently facing an unprecedented set of challenges. The rise of online-only agencies have combined with falling house prices, a general slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for the sector – I would not be surprised to see operators across this sector considering their options, such as consolidation.”
Smith added: “Overall, however, the latest figures reflect a relatively positive picture for most businesses. Adopting a long-term cautious approach, ahead of political uncertainty around Brexit, appears to be paying off, although sector-specific challenges and broader global economic changes will inevitably force some businesses to reconsider their operations and potentially restructure to improve efficiencies.”
