Scottish Corporate Insolvencies Jump a Mile
26th April 2018.
Scottish corporate insolvencies in the first quarter were up by 67 percent on the same period of last year, official figures have revealed.
These figures from the Accountant in Bankruptcy (AiB), suggest a return to trend as corporate insolvencies rise to the same level back in early 2017. The government agency found in their research, that there were 259 corporate insolvencies in the opening three months of 2018, up from 155 in the first quarter of last year. This aligns with the recent ‘apocalypse’ that has befallen the high street, with many retailers battling skyrocketing business rates and plummeting profits. The prolonged Brexit uncertainty has also reduced business confidence, making sure business owners are more likely to admit insolvency than risk investment.
By the end of last year, only 202 Scottish firms had pled insolvency, which had dropped from 210 the previous year. Unfortunately, tough economic conditions this year have soured corporate prospects, with many preferring to throw in the towel rather than risk financial ruin.
At the Credit Protection Association, our debt recovery and credit management services all ensure that not only do our members avoid closure, but continue to trade stronger than ever.
Tim Cooper, who chairs insolvency trade body R3 in Scotland said: “In many respects, this rise is not too surprising. Insolvencies of well-known companies have featured regularly on the newspaper front pages since the start of 2018, with further reports of firms scrambling to renegotiate rents and contracts with suppliers and landlords.”
The AiB observed that corporate insolvencies in Scotland in the first quarter of 2017 had been “particularly low”.
However, it also noted that comparing the year to March with the preceding 12 months, the number of corporate insolvencies in Scotland was up by 4.7% at 886.
Mr Cooper noted that R3’s members had reported that a number of companies “sought urgent advice” in the wake of the liquidation of construction and services company Carillion.
He said: “Another key factor behind the rise in insolvencies could well have been the repeated bouts of severe weather which froze activity in our high streets, roads, and on construction sites. Festive trading was also not as strong as anticipated for many firms, and the prospect of the looming ‘quarter day’ rent payment due at the end of March may well have been the final straw for a number of firms.”
As the economy perks up, firms are struggling to find their way back to the power seat. Almost two years of political uncertainty and tough economic conditions have picked away at business confidence. However, inflation is now easing off, unemployment is staying low and transition agreements with Brussels are underway. It is the time for firms to jump ahead.
Unfortunately, business owners are repeatedly hit with low self-esteem and hesitate to invest in their own business. If Britain is to sustain its competitive edge after Brexit our business sectors need to ensure their technology, services and equipment match the advancements boasted by rival economies.
At the Credit Protection Association, our debt recovery services provide a renewed financial freedom, allowing our members to explore new expansion opportunities. In order to dissuade our members from winding down, our credit management products banish late payers and any residual debt, giving them a swift confidence boost.
Not only does our team free up cash flow and spring clean finances, we also have a special scheme using a little-used legislation that helps business owners realise a hidden source of cash and unlock hidden potential within their business.
Don’t just lie down and become another insolvency statistics, contact CPA and see if we can help!
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