Quarterly company insolvencies fall in Q2

Despite a number of high profile insolvencies hitting the headlines, the number of companies entering administration in England and Wales fell during the second quarter of this year

KPMG, which conducted the analysis, said the decrease in insolvencies could be a temporary effect caused by pre-Brexit uncertainty.

The firm’s study of notices in the London Gazette shows that a total of 310 companies went into administration between April and June 2019, compared with 361 in the previous quarter - a fall of 14%.

Nevertheless, activity across the quarter was broadly on a par with the 303 companies that went into administration during the same period last year.

While high street names such as Bathstore and Select entered into insolvency, the number of retailers going into administration remained relatively flat, falling from 28 in Q1 2019 to 26 in Q2.

It was a similar picture for restaurants, pubs and clubs, which collectively saw 14 administrations over the quarter, including those of the Jamie Oliver Restaurant Group and the Red’s True Barbecue chain. This compared to 12 seen in Q1 2019.

However, there was a slightly more pronounced increase in the number of operators across the wider food and drink sector entering into administration over the quarter - up from 13 in Q1 to 18 in Q2.

Significant insolvencies in this space included the administration of the Welsh cheesemaker GRH Food Company Limited, luxury chocolatier Rococo Chocolates and the North East-based craft brewer Mordue Brewery.

Blair Nimmo, head of restructuring for KPMG UK, said: ‘You could be forgiven for thinking there had been a dramatic increase in corporate insolvencies since the turn of the year, but the truth is that numbers have tracked downwards over the last three months.

‘Prolonged uncertainty around Brexit has perhaps further delayed a “moment of truth” for companies in those sectors which are more vulnerable to economic volatility, while a number of companies in the retail and casual dining sectors have put forward CVA proposals as part of wider restructuring programmes which aim to put them on a more stable financial footing and head off the prospect of an administration.’

Pat Sweet | 22-07-2019

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