North East restaurants and pubs serve up top performance

Restaurant businesses in the North East are sitting comfortably at the top table in the latest stability rankings published by insolvency and restructuring trade body R3.

According to R3 research, eating establishments in the region have the lowest risk of falling into financial difficulty over the next 12 months of any such company anywhere in the UK.

The top spot was previously held by Scottish restaurants.

Pubs in the North East also continue to perform well in comparison to those in other regions, having beaten the North West into second place (out of the 12).

The region’s technology and tourism companies, meanwhile, were both in fourth place in their respective lists.

Overall, R3 found that North East businesses in seven of the 11 industries it monitors have a higher rate of stability than the national average for their sectors, with transport, hotel and professional services firms all in this position.

The North East’s construction sector, however, remained the least stable of all 12 UK regions. Similarly, retail, manufacturing and agriculture sectors in the region all fared worse than their national averages.

R3 said that one in four (25%) of all North East companies have a heightened risk of entering insolvency in the next year.

R3 North East chair Neil Harrold, a partner with Newcastle law firm Hay & Kilner, said: “The reputation of the North East’s restaurant sector and the people working in it has risen spectacularly over the last few years, and this is being reflected in the impressive business performance that a high proportion are now recording.

“A steady stream of investment is continuing to flow into new and established venues right around the region, and even though achieving sustained commercial success in the restaurant sector is notoriously difficult, there’s no reason to think that the present positive performance won’t be maintained.”

He continued: “We’ve recorded small improvements in a number of different regional industries in our latest research, which are encouraging, but the proportion of firms in the region’s construction, manufacturing and retail sectors that have a higher than average risk of going into insolvency in the next year is clearly a concern.

“Financial problems can impact on any business in any sector for any number of reasons, and it’s always best for management teams facing this sort of situation to take proactive action as quickly as they can, so they have the best possible chance of putting things right again.”

R3 compiles its insolvency risk tracker using business intelligence firm Bureau van Dijk’s ‘Fame’ database to measure business’ balances sheets, director track records and other information to estimate their chances of survival.

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