Written by: Keith Tully
Published: 27th April 2019
The number of company administrations recorded in England and Wales during the first three months of 2019 was up sharply as compared with the previous quarter and the first three months of last year.
In fact, the latest official figures from the Insolvency Service show that there were more administration cases in Q1 this year than during any comparable period since early 2014.
A total of 451 administration cases were recorded between January and the end of March this year, which represents a 21.8 per cent jump compared to the final three months of 2018.
When combined with the figures for liquidations and creditors voluntary arrangements (CVAs), the underlying number of corporate insolvencies recorded in the first quarter of this year was 4,187, which is 6.2 per cent higher than the figure for Q4 2018.
“Today’s underlying insolvency figures – the highest first quarter figures since 2014 – reflect the impact of stuttering consumer confidence and, to a degree, Brexit uncertainty on the business community,” said Stuart Frith, president of the insolvency and restructuring trade body R3.
“The factors which have been pushing insolvencies up over the last year or so haven’t gone away. Consumer confidence is low and consumers’ spending power is much diminished.”
Mr Frith pointed out that the first quarter of any year is often when retailers or consumer-facing companies will enter insolvency if they fall short of their sales targets in the run up to and during the festive period.
“The pre-Christmas period can be make or break, and Christmas 2018 was particularly tough,” he said.
The R3 president also pointed out that the first three months of 2019 was a period of particularly acute uncertainty for British businesses with regard to the UK’s position within the European Union.
Mike Cherry from the Federation of Small Businesses (FSB) has said that the latest figures on corporate insolvencies reflect the “immense strain that small business are currently under”.
Small companies across the country are faced with “rising employment costs, unfair business rates as well as significant uncertainty as a result of the Brexit process,” he said.