Insolvency activity in the South East saw a slight reduction during September following a big increase in August, and remains only slightly higher than the same period last year.
According to R3, the UK’s insolvency and restructuring trade body, the figures showed a decrease in insolvency-related activities from 264 in August to 219 in September. Tthese include administrator and liquidator appointments, together with creditors’ meetings.
The figure was 215 in September 2022.
However, R3 has warned against complacency because of the ongoing economic instability that continues to cause business difficulties.
Following its analysis of data about insolvencies and start-ups supplied by business intelligence provider Creditsafe, it found the number of firms in liquidation who owed money to their creditors in the South East was 296 – up from 225 in August, but well down on July’s figure of 402.
The South East figure is now the third highest for any part of the UK, behind Greater London, which has 493 and regularly tops the chart, and the West Midlands with 357.
Garry Lee, chair of R3’s Southern and Thames Valley region, said: “Although September’s corporate insolvency figures have shown a slight decrease for the South East this is no time for complacency in the business world.
“Our economic situation remains volatile – interest rates are high, inflation is coming down at a snail’s pace and still above target, energy costs are increasing again, the jobs market is flattening and growth is stifled at less than 0.5%.
“Interest rates are at a 15-year high, although the Bank of England left them at 5.25% in September after more than a year of consecutive rises and this means more businesses are likely to find themselves in difficulty.
“While it seems that we may be escaping a recession, there is no doubt that businesses are continuing to be stressed, with more companies entering an insolvency process in an attempt to resolve their financial issues.
“The demise of the long-established Wilkinson’s chain of stores only serves to emphasise how gruelling the retail sector is at present and it would not be surprising to see further problems occurring as people are restricting their spending to essentials.
He added that the Creditsafe figures for September do demonstrate promising movement, but we must be aware that this could be just a blip.
“It is our view that more and more businesses are at a point where they will need specialist help to survive – and that a sale or a liquidation may be their only options.”
Garry, who is an Associate Director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “Our message to directors is simple: be alert to signs your business could be financially distressed and seek advice as soon as they show themselves.
“If you’re having problems paying wages, staff or suppliers, if stock is starting to pile up, or if you’re worried about your business and its finances, that’s the time to speak to a qualified advisor.”
The number of start-ups in the South East decreased slightly from 6,075 in August to 5,661 in September, still well short of the 12-month high of 6,948 in March.
Creditsafe is a multinational business intelligence provider with services including company credit scores and credit report information.
R3’s Southern & Thames Valley region includes Buckinghamshire, Oxfordshire, Hampshire, the Isle of Wight and Berkshire.
