One of Britain’s leading restructuring and recovery experts has forecast a ‘grim outlook’ for British businesses as liquidations reached new record levels today.
Colin Haig, Partner and National Head of Restructuring at UK top 10 accountancy firm Azets, reacted to the latest government statistics on new company insolvencies in England and Wales for Q2 2023 (April to June).
There were 6,342 company insolvencies in Q2 2023 (April to June), the highest since Q2 2009, 9% higher than in Q1 2023 and 13% higher than in Q2 2022.
There were 5,240 creditors’ voluntary liquidations (CVLs), the highest quarterly level since the start of the series in 1960, and 637 compulsory liquidations.
Colin Haig said: “The latest quarterly insolvency statistics provide a grim outlook for British businesses, with the lingering aftermath of the pandemic compounded by mounting debt burdens, supply chain disruptions, labour shortages, and rising input costs. Smaller businesses, in particular, have been hardest hit, struggling to cope with reduced consumer spending and restricted access to finance.
“Too few business owners are reacting quickly enough to distress signs. Early intervention and proactive restructuring can help prevent insolvencies and pave the way for sustainable recovery, avoiding liquidation.
“A restructuring plan can lead to the rescue of the business as a going concern. This means that jobs can be saved, suppliers can continue to be paid, and the business can maintain its relationships with customers and clients. It also allows the company to reorganise its operations, improve efficiency, and implement changes needed for long-term sustainability.
“It’s likely administrations will keep rising over the next 12 months – but an administration is not always bad news. Any transaction that keeps a business trading and preserves IP, capital, and employees, is a solution. Switched on management teams have greater access to these solutions. For businesses navigating through these turbulent times, strategic planning and prudent financial management is essential.”