FINANCE
Sharp drop in companies falling into administration
The number of companies falling into administration in the Midlands fell sharply during the second quarter of 2017.
Analysis by KPMG shows that
the number of companies in the Midlands entering administration fell from 41 in the first quarter of the year to 28 in the second quarter. This is also a fall when compared to the same period last year (Q2 2016) which saw 42 corporate insolvencies. The picture across England and Wales mirrors this trend, with insolvencies across the country decreasing from 327 in the first quarter of the year to 280 in the second quarter. However, while the overall numbers
both nationally and in the Midlands have softened slightly, KPMG’s analysis shows the environment still remains tough for retailers and companies across the wider consumer and leisure industries, with 27 retailers entering insolvency over the quarter nationally. Chris Pole (pictured), Restructuring Partner at KPMG in the Midlands, said:
“On the face of it, the latest figures seem encouraging and do reflect what we are seeing on the ground, with much of our current work revolving around strategy and options, cost reduction and working capital management rather than insolvencies. However, we should not be lulled into a false sense of security, particularly as there are still certain hotspots which
give cause for concern”. “There are clouds on the horizon.
The impact of Brexit remains to be seen
and the recent election has undoubtedly introduced greater uncertainty resulting in a negative effect on consumer and corporate confidence. “While inflation for the month of June
was down for the first time in over a year, it’s still well above average earnings growth, and there is continued speculation that interest rates may soon rise. Additionally, adverse exchange rate movements have impacted certain sectors, with businesses expressing concern over their ability to pass on additional costs to their customers.”
56 business network September 2017
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