Main Menu

Better outlook for firms

Stable oil sector sees company failures fall

Blair NimmoGreater stability in the oil and gas sector has helped Scotland  return to “business as usual” in terms of company survival prospects, according to KPMG.

New data shows a significant drop in the number of company failures in the first three months of 2017.

Business insolvencies fell by 19% (down from 211 to 170) compared to the corresponding period last year.

This decrease is reflected in both liquidation appointments (down 20%), which tend to affect smaller businesses, and administrations (down 14%), which usually involve larger organisations.

Blair Nimmo, head of restructuring for KPMG in the UK, said:While insolvencies are inevitable in a corporate environment, the latest statistics present a good picture for Scotland, and we have returned to what we would call “normal” or “business as usual” levels.

“We have seen some stability return to the oil and gas sector, and while there remains some critical issues, at no point over the past three years have we experienced the level of sector-related insolvencies which might have been expected, given the drastic reduction in the oil price.

“The general consensus is that the oil price has broadly bottomed out, subject to an unforeseen event. 

“That being said, we are working with a number of oil and gas firms, albeit in a more stable environment, in areas such as working capital management, where often we are finding significant scope for improvement at very little cost to the business.

“Beyond that, we are seeing little sector impact across Scotland or indeed any Brexit-related impact.  In the context of higher input prices due to adverse exchange rate movements, it is of course possible that this could be partly due to hedging.

“It is also interesting to note the latest figures tie in with the findings from the Federation of Small Businesses, which indicated business confidence in Scotland increased during the first quarter, albeit from a low base.

“Similarly, the British Chamber of Commerce has reported its members had a good start in the first three months of this year.

“While some short-term uncertainty following the news of the general election in June is expected, we do not predict this will manifest in any significant change in insolvency numbers in the short or longer term.”

Quarter-on-quarter comparison

 

Quarter

 

Liquidation

Appts

Admin  & Rec Appts

Total Corporate

Insolvency Appts

Q1 2014

220

19

239

Q2 2014

225

15

240

Q3 2014

239

15

254

Q4 2014

192

18

210

Q1 2015

168

20

188

Q2 2015

235

27

262

Q3 2015

158

19

177

Q4 2015

241

36

277

Q1 2016

189

22

211

Q2 2016

246

24

270

Q3 2016

255

27

282

Q4 2016

180

26

206

Q1 2017

151

19

170

 

 

 

 

 

 

 

Share The News Tweet about this on TwitterShare on FacebookShare on Google+Email this to someoneShare on LinkedIn





Leave a Reply

Your email address will not be published. Required fields are marked as *

*