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Sunday
May082011

Rise in "distressed" UK companies.

As the UK limps back to economic recovery, a recent survey has shown that 186, 554 companies appear to have serious financial problems. Insolvency gurus Begbies Traynor claim that these companies are currently experiencing problems that are "significant" or "critical". The rise in companies with these problems is 15% up on this time last year and more crucially, there has been a 26% in the last 3 months.

With more London stock exchange companies issuing profit warnings, the problems are not confined just to the Small & Medium Enterprises (SME's). Restaurants and Bars appear to be experiencing the biggest problems with 68% in significant or critical problems. Culture & and leisure companies in these difficulties has risen by 60%. Sport and recreation are also taking a big hit with 23%.

Commenting on some of the reports findings, Begbies Traynor Executive Chairman Ric Traynor is quoted as saying: "Compared with our figures for food retail, which show little change, it seems likely that a fall in consumer confidence and spending power driven by anticipated job losses lies at the core of the leisure sector's troubles,". The governments recent austerity measures clearly account for  lack of overall consumer confidence as both private and public sector employees await the outcome of their fate regarding ongoing employment.

As impending redundancies loom it would also appear that employers are also taking a tougher stance as regards payments due while contracts and sales steadily dry up. In a bid to conserve cash, court actions by employers are taking place at a faster rate. Mr Traynor says "High levels of legal actions taken against debtors indicate that creditors are attempting to maximise cash collection right across their customer base,". He goes on : "The hike in oil prices and January's VAT increase has made cash flow and credit control essential priorities for most businesses, with some seeking payments through the courts." 

Do you have an insolvency pending? It does not have to be a headache or a hassle. For all of the help you will need go to http://stmworldwide.com/company-dissolution        

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