Scottish Firms At Insolvency Risk
19th December 2017.
The number of Scottish companies at risk of insolvency has risen over the course of 2017, according to insolvency and restructuring trade body, R3.
According to a new report by R3, industry in Scotland is noting a markable spike in the numbers of businesses reporting risk of insolvency.
The report found that 26.6 per cent of Scottish firms in December fell into risk of insolvency, up by 36 per cent from January 2017.
The insolvency body reassures the business community that Scotland is faring far better than the UK. According to the research, Scotland has the lowest proportion of at-risk firms compared to anywhere in the UK. In all, nearly a third of UK businesses were at greater risk of insolvency in December, up from nearly a quarter in January.
The insolvencies within the Scottish industry are also dependent on sector, with the restaurant sector seeing a small rise in risk levels, while the Scottish technology and IT sector will finish the year with the highest percentage of firms at risk on insolvency, at 40 per cent
Tim Cooper, Chair of R3 in Scotland warns it’s not been the “easiest of years for the Scottish economy”.
Commenting on the data, Mr Cooper explains that factors such as Brexit uncertainty and high inflation have had a negative impact on Scottish business.
It remains to be seen whether the changes recorded by R3 over 2017 will continue into 2018. Business advisors are reporting more demand for their services from companies which are experiencing financial distress.
The figures are from R3’s latest insolvency risk tracker. The tracker is compiled using Bureau van Dijk’s ‘Fame’ database and other information to work out their likelihood of survival over the next 12 months.
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