Number of companies entering administration leaps by a third in the third quarter
The number of companies entering administration jumped by more than a third during the third quarter of the year, analysis published today showed.
A study of notices in the London Gazette by accountancy firm KPMG showed a total of 417 companies went into administration between July and September 2019, compared with 310 in the previous quarter, and 322 during the same period last year.
Notable cases include the administration of holiday companies Late Rooms and Super Break, Glasgow shipyard Ferguson Marine Engineering and energy supplier Eversmart Energy.
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Travel company Thomas Cook was not included in the figures as it is in compulsory liquidation rather than administration.
Despite the failures of well-known names Jack Wills, Karen Millen and Forever 21, the number of retailers going into administration fell, from 26 in the second quarter to 18 in the third quarter.
In contrast, the building and construction sector experienced a spike in companies going into administration, from 49 in the second quarter to 76 in the third quarter.
The property sector also saw an uptick in insolvencies, with the number of businesses entering administration rising from 18 to 33 over the quarter.
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Insolvencies in the pub, restaurant and club sector also increased, from 14 in the previous quarter to 26 in the third quarter.
Blair Nimmo, head of restructuring for KPMG UK, said: “For some time now, corporate insolvencies have been ticking along at fairly steady levels, so the more marked increase in administrations seen last quarter may herald the start of a new wave of activity. This is perhaps unsurprising, given the challenges presented by fragile consumer confidence, rising overheads from fluctuations in exchange rates, increasing employment costs and general political uncertainty.
“The good news is that companies across all industries are now proactively addressing long-term issues and attempting to place themselves on a more sure financial footing, ahead of any further macro-economic challenges that are coming down the line. From CVA proposals for retailers, to refinancing in other sectors, there are definitely options out there, and they seem to be paying off for those firms that have opted to take a fiscally cautious approach.”