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Analysis of the latest national corporate insolvency statistics by
PricewaterhouseCoopers has found that 5393 companies entered insolvency in the
third quarter of 2011, an increase of 7.4% on the same quarter of 2010 but a
decrease of 2.1% compared to the previous quarter of 2011.
The cumulative total insolvencies over the first three quarters of 2011 were
3.4% higher than the corresponding first three quarters of 2010.
Mike Jervis, partner, business recovery services, PwC, explained: "These numbers
show an upward trend in the total number of insolvencies. The cumulative impact
of fragile economic conditions is starting to affect companies particularly at
the SME level - for example, 85% of the insolvencies in the third quarter of
2011 related to companies with less than £1 million* turnover compared to 81% in
the corresponding quarter of 2010.
"There is evidence that companies are increasingly using company voluntary
arrangements - which show a 30% increase in quarter three 2011 compared to
quarter three 2010 - in the retail and construction sectors. This indicates
wider creditor engagement in insolvency processes.
"However, the outlook is extremely uncertain and the tried and trusted rules
apply - manage cash robustly and keep your stakeholders informed."
Source: Credit
Control Journal
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