Mon, 23 Jan 2023 | BUSINESS NEWS
New research from insolvency and restructuring trade body R3 has revealed a 32 per cent increase in insolvency-related activity in Scotland in December 2022, compared to the same period a year earlier. The jump in activity comes amid a UK-wide increase in insolvencies, as companies struggle with a range of headwinds.
R3’s analysis of Creditsafe data found that there were 142 instances of insolvency-related activity in Scotland last month, compared to 107 in December 2021. This figure was the second-highest for 2022, behind only March, which saw 201 cases of insolvency-related activity.
The figure was the biggest year-on-year increase in insolvency activity across all the regions and nations of the UK. The next highest increase was in the East Midlands (22.8 per cent), followed by the West Midlands (9.8 per cent) and the South West (9.2 per cent).
Recent figures from the UK’s Insolvency Service found that there had been 1,964 company insolvencies across the UK in December 2022, up 32 per cent from December 2021 and a 76 per cent increase compared to December 2019, prior to the COVID-19 pandemic.
This increase was largely driven by a 22 per cent year-on-year increase in creditors’ voluntary liquidations, which rose to 1,659 in December 2022. A range of factors are contributing to this sharp rise in insolvencies, including rising costs, falling consumer sentiment, COVID-19-related debts and owner fatigue following the pandemic and several years of economic and political uncertainty.
Figures from PwC also found that 346 winding-up petitions (a key indicator of approaching financial distress) were issued in December 2022. This was on top of the nearly 3,000 winding-up petitions issued during the first 11 months of last year, more than three times the number that were issued during the first 11 months of 2021, and points to continuing financial distress among UK businesses.
Richard Bathgate, Chair of R3 in Scotland, commented: “More and more directors are turning to insolvency processes to resolve their financial issues in the face of rising costs, low consumer confidence, and ongoing economic turbulence.”
“These issues aren’t going to go away overnight, and we urge company directors to be aware of the first signs of financial distress and seek advice from a qualified source as soon as they show themselves. By doing so, they’ll have more time and more options available to them than if they’d waited for the issue to get worse and could potentially find that taking action earlier leads to a better outcome for their businesses.”
Read more about the sharp increase in UK insolvencies.
Find out how the struggles of UK businesses could drive M&A activity.
Click here to view the UK's latest distressed businesses.
View recent UK administrations.
Turnkey shopfitting specialists providing a complete package with services including consultation design (2D 3D visualisations and walkthroughs) procurement contract management joinery manufacture and installation of all elements. The company operate...
This well known and successful business, set up over 38 years ago, provides a comprehensive workshop service for motor vehicles/cars and light commercial vehicles and within the busy Surrey and South East region and has been in the current vendor’s o...
LEASEHOLD
The company specialises in producing furniture from a wide array of materials, allowing it to act as a one-stop shop for private and commercial clients. Operating nationally, the company caters to 20 active industrial and commercial clients, all of w...
LEASEHOLD
07
|
Feb
|
Marine engineering firm to target M&A after revenue grows 21.5 per cent | BUSINESS NEWS
Marine engineering and warehousing business Shepherd Offshor...
07
|
Feb
|
Administrators exploring accelerated sale of telecoms contractor | ADMINISTRATION
Administrators from RSM UK Restructuring Advisory LLP are se...
06
|
Feb
|
M&Co brand bought out of administration, but 170 stores still to close | ADMINISTRATION
Scottish clothes retailer, M&Co has been bought out of admin...
Sign up to receive our acquisition alert emails to get your FREE guide
07
|
Feb
|
Administrators exploring accelerated sale of telecoms contractor | ADMINISTRATION
Administrators from RSM UK Restructuring Advisory LLP are se...
07
|
Feb
|
Marine engineering firm to target M&A after revenue grows 21.5 per cent | BUSINESS NEWS
Marine engineering and warehousing business Shepherd Offshor...
06
|
Feb
|
Australian firm announced as preferred bidder for collapsed UK battery start-up | ADMINISTRATION
Recharge Industries has been named as the preferred bidder f...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources