Insolvency-related activity has increased marginally in the South East after three months of decreases, says R3, the UK’s insolvency and restructuring trade body.
Latest figures showed a slight rise in insolvency-related activities from 202 in November to 225 in December – these include administrator and liquidator appointments together with creditors’ meetings. This figure is also marginally down on the figure of 235 in December 2022.
R3 has warned that current economic pressures remain a big challenge for businesses, following its analysis of data about insolvencies and start-ups supplied by business intelligence provider Creditsafe.
Its findings also revealed the number of firms in liquidation which owed money to their creditors in the South East has dropped for the second month running, from 284 in November to 235 in December.
The South East figure for insolvency-related activities remains the sixth highest for any part of the UK, behind Greater London, which has 539, the North West, 377, East Anglia, 326, Yorkshire & Humberside, 248 and the West Midlands, 239.
Nationally, a total of 2,522 companies became insolvent in December 2023, down 7% on the previous month (November 2023). The total number of insolvencies decreased by 1% compared to December 2022, says Creditsafe.
Neil Stewart, chairman of R3’s Southern and Thames Valley region, said:
“The regional picture remains uneven with December’s rise in insolvency-related activities suggesting that some beleaguered business owners may have ceased trading as the year drew to a close."
“Although some supermarkets experienced exceptional results in the run up to Christmas, with discounters Aldi and Lidl enjoying spectacular sales levels, the same cannot be said for all sectors and we anticipate further insolvency activity in January for businesses whose poor festive trading may have been the last straw."
“We continue to see a reduction in energy costs and an ongoing fall in inflation – down to 3.9% in the latest figures – which is positive news, albeit that inflation is still substantially above the Government’s 2% target and global energy prices remain volatile."
“The near future is looking rosier for this region than some other parts of the country but rising costs, cautious spending, creditor pressure and wage demands still seem likely to hold back growth overall.”
Neil, a Regional Associate Director at insolvency litigation financing company Manolete Partners, added that the Creditsafe figures for December demonstrated continuing unpredictability and that more companies would need to seek professional help.
He said: “Businesses across the South and Thames Valley would be wise to remain alert and engage expert help, guidance and support at the first sign of business distress. Without decisive action, circumstances can quickly become irrevocable and some kind of insolvency procedure can become unavoidable."
“Therefore, decision makers and business leaders need to keep a lookout for warning signs because the earlier issues are addressed, the more options are available for a better outcome.”
“These warning signs include maxed-out borrowing, cash flow problems, supply difficulties, late wages, delays in paying suppliers and HMRC chasing tax payments. Experienced, accomplished and skilled help is available – make sure you use it before it is too late.”
The latest Creditsafe data shows a slight, increase in the number of companies with invoices that had gone past their payment deadline from 57,174 in November to 57,208 in December. The 12-month high remains 60,831 in February.
Meanwhile, the number of late payments made by companies owing money was down from 481,272 in November to 473,328 in December.
The number of start-ups in the South East was down from November’s 6,270 to 4,743 in December, which is traditionally the quietest month for such activity. The 12-month high remains 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, Dorset, Wiltshire and Berkshire.
