The number of companies put into administration in the UK has lept 60%
The number of companies being placed into administration in the UK in the second quarter of the year was 60 % higher than during the same period last year and 9 % up on the previous quarter, according to new figures.
The Government's Insolvency Service released figures which show a total of 938 companies were placed in administration in England and Wales in the three months ending 30 June, compared with 585 in the same period last year. Receivership appointments more than doubled compared with the same period last year, jumping from 77 in the second quarter of 2007 to 177 the same period of 2008.
Looking at the first six months of the year, the number of administrations is 42 % higher than the first half of 2007.
Total company liquidations in England and Wales were also up significantly in the second quarter of 2008, growing from 3,189 in the first quarter to 3,560, an increase of 15 %.
Nick Wood, Recovery and Reorganisation Partner with Grant Thornton, said the fact that the restructuring and insolvency departments of banks and major accountancy firms were gearing up for a significant flow of work in the autumn was the clearest indication yet of the scale of business difficulties.
He added: ‘House building is almost dead in the water at present, with jobs within the industry disappearing by the day.’
Those sectors directly affected by discretionary consumer spending, including retail and leisure businesses such as pubs and restaurants are also set for a very turbulent time in the next 18 months, said Wood.
‘Expect private equity to begin rescuing businesses with strong fundamentals but short term cash flow difficulties - as long as the price is right.’
‘Well managed businesses with strong cash flows can certainly survive, and even prosper in the current climate. Cash is king in these turbulent times.’