The Q1 2018 corporate insolvency statistics for England & Wales, published by the Insolvency Service, have revealed that the underlying number of insolvencies (excluding bulk insolvencies) has increased in Q1 2018, to the highest quarterly level since Q1 2014.
Total company insolvencies have risen by 12.6% from Q1 2017 and the number of compulsory liquidations in Q1 2018 have increased by 26.3% on the previous quarter.
The effects of slower GDP growth, inflation leading to rising input costs combined with customer price sensitivity, business rates changes, an increase in the National Living Wage, and the final stages of the pensions auto-enrolment roll-out have impeded momentum.
The Carillion failure is still never very far away from peoples’ minds and it is probable that the knock-on effect on the supply chain will be evident for some time to come.
Trade credit insurer Euler Hermes has also warned that Britain is expected to experience the second sharpest rise in insolvencies of any major economy in 2018. Weakness in the pound and increased input costs will push the level offailures up by 8%. Milo Bogaerts, CEO of Euler Hermes UK and Ireland, said: “The rise in insolvencies has the potential to start a domino effect of overdue or non-payment, which can impact large companies and smaller suppliers throughout
supply chains.”
Paul Craig, Managing Director at SIA Group, comments: “The key for businesses facing distress is to seek independent advice from trusted turnaround professionals at an early stage. The asset-based lending (ABL) industry is also ideally placed to assist businesses in these situations through providing refinancing and restructuring facilities that deliver the vital headroom that firms need to see through their turnaround plans.”
“Since ABL is based on asset values rather than being dependent on existing profitability, it is a proven vehicle to enable positive change in the fortunes of a business. With our team’s deep knowledge and experience across all asset classes, SIA Group is able to provide certainty in uncertain times through dependable asset valuation and advisory services that maximise realisation.”
