• Swindon & Wiltshire Economy
• Friday November 17 2023
• Author Name: Peter Davison

Insolvencies down slightly in Berkshire and Wiltshire – R3

Insolvency-related activity has reduced marginally in Berkshire and Wiltshire following a big drop in September but remains significantly higher than the same period last year, says R3, the UK’s insolvency and restructuring trade body.

The latest figures showed a slight decrease in insolvency-related activities from 219 in September to 211 in October – these include administrator and liquidator appointments together with creditors’ meetings. However, the figure was 164 in October 2022.

However, R3 has warned that ongoing economic instability is continuing to cause business distress, following its analysis of data about insolvencies and start-ups supplied by business intelligence provider Creditsafe.

Its findings also revealed the number of firms in liquidation who owed money to their creditors in the South East has significantly increased to 418 – up from 296 in September, a 41 per cent increase, and is now above the year high of 404 in May.

The South East figure is now the second highest for any part of the UK, behind Greater London, which has 564 and regularly tops the chart.

The total number of UK company insolvencies for 2023 rose to 24,955. This number represents a 16 per cent increase compared to the same period in 2022 and a 63 per cent increase compared to 2021.

Garry Lee, chair of R3’s Southern and Thames Valley region, said: “The picture remains uncertain with insolvency trends continuing to be uneven on a month-by-month basis.

“Our unpredictable economic landscape is not good for the smaller business with the vast majority of both creditors voluntary liquidations and compulsory liquidations involving companies with a turnover of less than £1 million per annum.

“It is obvious that current unrelenting economic challenges ­–­ growing costs, rising inflation, cautious consumer spending, higher interest rates, increased creditor pressure, requests for higher wages and director fatigue ­– are continuing to hit businesses hard

“In recent months, many companies have been affected by these multiple economic issues and we fear that corporate insolvencies may remain high and increase further into the final quarter of 2023.

“The construction sector is the most badly hit, followed by wholesale/retail and food/accommodation and, although inflation seems to be steadying at last and energy costs starting to go down, the knock-on effect and the arrival of winter is likely to take its toll.

“The Creditsafe figures for October demonstrate uncertain times, and it remains our view that more and more businesses are at a point where they will need specialist help to survive – and that a sale or a liquidation may be their only options.”

Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “Our message to directors or major stakeholders is that if you are concerned in any way about the future of your business you should act quickly.

“Remain vigilant and if you spot warning signs seek professional help immediately. The sooner a problem is diagnosed the more likely it is that a solution can be found.

“If you’re having problems paying wages, staff or suppliers, if stock is starting to pile up, or if you’re worried about your business and its finances, that’s the time to speak to a qualified advisor.”

The latest Creditsafe data also showed a slight fall in the number of companies with invoices that had gone past their payment deadline from 57,583 in September to 57,482 in October. The year-high remains 60,831 in February.

Meanwhile, the number of late payments made by companies owing money was slightly down at 481,052 in October compared with 482,471 in September.

The number of start-ups in the South East increased to 6,262 in October 5,661 in September, just 686 short of the 12-month high of 6,948 in March.

Creditsafe is a multinational business intelligence provider with services including company credit scores and credit report information.