Company administrations reach highest levels since 2014 - Resolve Group UK

Company administrations reach highest levels since 2014

Resolve Group UK

Company administrations reach highest levels since 2014

Latest Government statistics show the highest underlying level of company insolvencies in any quarter since Q1 2014, and personal insolvencies at their highest quarterly levels since 2010. This suggests that there has been a further deterioration in the on-going difficult economic environment for both businesses and consumers.

It seems the on-going lack of certainty over Brexit continues to cause significant problems for businesses, delaying investment decisions, and in some cases increasing costs and reducing cash-flow as a result of stockpiling and storage. Rising overheads from sterling fluctuations, increased employment costs and the continued challenges with business rates are also having a negative effect in many sectors. This is further exacerbated by the insolvency of one company having a knock-on effect on others in its supply chain, which has been particularly apparent in the construction sector.

The elevated level of personal insolvencies, made worse by the increasingly difficult credit situation, seems also to be having a detrimental and domino effect on businesses as consumer confidence and demand weakens and spending is cut back.

Resolve Group UK

Company administrations reach highest levels since 2014

The official Government statistics, released on 30th October 2019, show that total company insolvencies in England and Wales increased slightly by 0.4% in Q3 2019 compared with Q2 2019, and were 1.6% higher than the same quarter a year previously. In total there were 4,355 company insolvencies in Q3 2019, the highest underlying level of company insolvencies in any quarter since Q1 2014.

The increase in total company insolvencies was driven by a 20% rise in administrations and a 2.3% rise in Creditor Voluntary Liquidations (CVLs) compared to the previous quarter. Administrations reached their highest level since Q1 2014 at 484, and increased by 26.7% compared to the same
period last year. A total of 71.5% of all of all company insolvencies were CVL’s which at 3,115 reached their highest quarterly level since Q1 2012.

Compulsory liquidations decreased by 16.4% in comparison with Q2 2019, a decline for the third successive quarter. Company Voluntary Arrangements (CVA’s) also declined slightly to 89 in Q3 2019 compared with 92 in Q2 2019

For the first time since Q1 2018 there was also one receivership recorded.

In the 12 months ended Q3 2019, the highest number of new company insolvencies was again in the construction industry with 3,106 insolvencies.

Resolve Group UK

Personal insolvencies at their highest quarterly levels since2010

Individual insolvencies increased slightly in England and Wales in Q3 2019 to 30,879, a rise of 0.6% on Q2 2019. Compared to the same quarter in 2018 there has been an increase of 22.7%.
This slight rise was caused by an increase of 1.4% in Individual Voluntary Arrangements (IVA’s) to 19,973.. IVAs were the most common type of individual insolvency, accounting for 64.7% of cases.

Debt Relief Orders (DRO’s) also increased slightly by 0.3% to 6,784, but decreased by 3% on the same quarter last year.

There was a decrease of 2.6% in the number of bankruptcies to 4,122, which also declined by 1.2% compared to the same quarter in 2018.

ReSolve recommends that businesses should seek professional advice to help manage financial problems or establish long term business plans.

We believe that early action is the key to avoiding or surviving financial difficulties.

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