Company administrations more than doubles from last year and
set to rocket in 2009
The number of companies being placed into administration in
England and Wales has surged to 2,018 in the fourth quarter of
2008, according to statistics released today by the
Government's Insolvency Service. This figure should however be
adjusted downwards to reflect a single appointment involving 729
managed service companies in September 20008. The adjusted figure
of 1,289 is still 124% higher than in the fourth quarter of 2007,
when 575 new administrations were recorded and 28% higher than the
1,007 administrations announced in the third quarter of 2008.
The single appointment over 729 managed service companies was
second only to Grant Thornton's record appointment as
administrators of 844 companies managed by tax solutions provider
Asciom Solutions Ltd. and Safe Solutions Ltd. in Q4 2006.
Company insolvencies in England and Wales also jumped by 51.6%
to a total of 4,607 in the final quarter of 2008 compared to the
same period the previous year, when 3,039 liquidations were
recorded. This represented an increase of 11.9% on the third
quarter of 2008, which saw 4,118 liquidations.
"These numbers are bad, but they are going to get progressively
worse as business and consumer confidence continues to fall," says
Malcolm Shierson, Partner at Grant Thornton's Recovery and
Reorganisation practice.
"Companies across all sectors will struggle when they need to
refinance their debt as lenders rein back on corporate
lending," says Shierson, adding: "On top of this, the arteries of
business are being clogged up as credit insurers cut back on the
provision of cover for suppliers and contractors."
"More retail businesses will run into difficulties as British
consumers maintain a negative outlook in the face of rising
unemployment, which is predicted to reach three million, as
well as a decline in spending power following significant rises in
essential household expenditure," Shierson specifies.
"It is vital that companies facing liquidity problems or
difficulties refinancing their debt seek professional advice
immediately," warns Shierson.
Please note that these figures are available at:
http://www.insolvency.gov.uk/otherinformation/statistics/200902/index.htm