UK corporate insolvencies on the rise

News Article - 04 October 2011
Category: Business

The number of UK company insolvencies has increased by nine per cent on the same period last year, according to PricewaterhouseCoopers' (PwC) latest insolvency figures.

In Q3 2011 there were 3,601 corporate insolvencies, but although this figure was a nine per cent increase on Q3 2010, it signalled an 11 per cent decrease quarter-on-quarter.

The major climbers were the construction, hospitality and leisure and retail sectors. PwC partner, Mike Jervis believes retailers in particular have to think fast about the impending Christmas shopping period.

He said: "Retailers and their stakeholders need to forecast obsessively, especially on their cash, and think about what the period post-Christmas might look like.

"Those involved with retailers must proactively engage with management and have a contingency plan in place well in advance of the December rent quarter day.

"The impact of public sector cuts on the private sector is only just being felt. There have been a number of warnings this week, but the ripple effect down the supply chain is still rather invisible.

"Managing the fall-out from this will be a major factor contributing to the trends in the December quarter insolvency numbers."

At the beginning of the year, Begbies Traynor, a leading business recovery specialist, predicted a 10 per cent rise in corporate insolvencies and this has proven to be not far wide of the mark.

Ric Traynor, executive chairman of Begbies Traynor, said: "Given historical experience, these high levels of distress would be expected to translate into a 10% or greater rise in formal insolvencies in 2011, due to hardening creditor attitudes, the impact of public sector cuts and the gradual unwinding of Government support measures."

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