Corporate insolvency figures continue to rise
Latest corporate insolvency figures have shown a slow upward trend, with Q3 figures increasing by 7.4% on the same period in 2010.
5,393 companies entered insolvency in the last quarter, which was 2.1% less than Q2 of 2011, but the cumulative total insolvencies over the first three quarters was 3.4% higher than the corresponding time in 2010.
Sean Hamilton, director at PwC in the North East commented: “The cumulative impact of fragile economic conditions is starting to affect companies particularly at the SME level – for example, 85% of the insolvencies in the third quarter of 2011 related to companies with less than £1 million turnover compared to 81% in the corresponding quarter of 2010.
“There is evidence that companies are increasingly using company voluntary arrangements – which show a 30% increase in quarter three 2011 compared to quarter three 2010 – in the retail and construction sectors. This indicates wider creditor engagement in insolvency processes.
“However, the outlook is extremely uncertain and the tried and trusted rules apply – manage cash robustly and keep your stakeholders informed.”