UK corporate insolvencies lowest since Q2 2008
Q4 2012 Insolvency figure down 10.7 percent y/y
By CFOWorld.co.uk staff | CFO UK | Published 18:44, 01 February 13
Corporate insolvencies in England and Wales fell by 10.7 percent over the fourth quarter of 2012 versus the corresponding quarter of 2011, according to figures released by the Insolvency Service on Friday.
The data suggests that 3,834 firms suffered either compulsory or voluntary liquidation. The headline figure is the lowest since the second quarter of 2008, the Insolvency Service said. It is also down 3.3 percent on the previous quarter.
Responding to the figures, Nick O'Reilly, insolvency partner at HW Fisher & Co., felt there were reasons to remain concerned.
"The lifeless hands of the UK's zombie companies slowly tightened their grip on the economy's throat throughout 2012. Their poisonous, growth-stifling effect is one of the key reasons the UK is lurching towards a third recession," he told CFOWorld.
"But while their impact is obvious, until now the zombies themselves have been hard to see. Yet the big drop in both compulsory liquidations and company voluntary arrangements (CVAs) in 2012 hint that there are a large number of zombie businesses which are past saving and beyond restructuring," O’Reilly added.
Tracy Ewen, MD of IGF Invoice Finance, felt that regardless of what the statistics say, they fail to reveal the entire insolvency picture.
"For instance, some businesses may wait until a creditor winds them up or the Government shuts them down as a result of not having filed accounts for several years. Such behaviour could be skewing the insolvency statistics," Ewen said.
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