Fall in failures is cause for optimism amid uncertainty
Edinburgh-based Hutchinson Networks was among the failures
Scotland’s corporate sector is showing a greater resilience to current uncertainty after new figures revealed a sharp fall in company failures.
The number of companies entering into administration, receivership or liquidation in Scotland has decreased by almost 35% in the last quarter, despite a number of high profile cases, according to new analysis from KPMG.
There were a total of 158 corporate insolvency appointments in the three months to 30 September 2019, against 244 in the previous quarter, and 242 in the same period last year.
Of these , 140 involved liquidation, compared to 232 in quarter two. There were 18 administration and receivership appointments, up from 12 in the previous quarter; while 43 cases were HMRC appointments, more than half the 93 in Q2.
Blair Nimmo, head of restructuring for KPMG, said: “With ongoing political and economic uncertainty increasing pressure on the UK’s retailers, there have been a number of particularly high profile administrations and liquidations in the last quarter, but our latest insolvency data offers up some cause for optimism.
“The latest quarterly data confirms a relatively minor rise in administrations, with liquidations and HMRC cases both down. The data appears to reflect a growing sense of resilience from the business community.
“Companies across all industries are now proactively addressing long-term issues and attempting to place themselves on a more sure financial footing, ahead of any impending challenges that issues including Brexit could create.
Blair Nimmo: Cause for optimism
“From CVA proposals for retailers, to refinancing in other sectors, there are options for the business community, and they seem to be paying off for those Scottish firms that have opted to take a fiscally cautious approach.
“Nevertheless, these results are surprising in the context of Brexit, and the 31 October deadline, around which we are seeing an increasing level of concern across all businesses, and some specific sectors. With the outcome still unclear, the next quarter’s results should be interesting.”