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Drop in Insolvency Numbers

There has been a sharp fall in the number of companies falling into administration across England and Wales during the second quarter of 2017.

Analysis by KPMG of notices in the London Gazette found that the number of companies entering administration fell from 327 in the first quarter of the year to 280 in the second quarter. This is also a fall when compared to the same period last year (Q2 2016), which saw 294 corporate insolvencies.

However, while the overall numbers have softened slightly, KPMG’s analysis shows the environment still remains tough for retailers and companies across the wider consumer and leisure industries, with 27 retailers entering insolvency over the quarter.

Blair Nimmo, head of Restructuring at KPMG, explained that he expects the dip seen in Q2 to level back out over the second half of the year, as companies contend with further economic uncertainty and a continued gradual slowdown in consumer spending.

“However, we should not be lulled into a false sense of security, particularly as there are still certain hotspots which give cause for concern,” he said. “Retailers, particularly those mid-range high street fashion brands, continue to battle in the face of increased competition, mounting cost pressures and a squeeze on household expenditure. There is certainly a number of these businesses who face a tough few months ahead.”

“There are other clouds on the horizon,” he added. “The impact of Brexit remains to be seen and the recent election has undoubtedly introduced greater uncertainty resulting in a negative effect on consumer and corporate confidence.”

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