R3 Southern & Thames Valley: Insolvency activity rises

WINDING-UP WARNING: Southern and Thames Valley R3 chairman Garry Lee

INSOLVENCY UPDATE: Southern and Thames Valley R3 chairman Garry Lee has warned that the number of corporate insolvencies is back on the rise in 2023

Insolvency related activity has jumped back up in the South East after a dip at the start of 2023, according to new figures. R3, the insolvency and restructuring trade body, warned that the number of businesses encountering difficulties was nearing the peaks seen in December and November of last year. Its analysis of the latest data supplied by business intelligence provider Creditsafe showed that there were 230 counts of insolvency related activity during February in the region. That compares with 157 in January, 235 in December and 261 in November. It was 14% higher than the 202 counts recorded in February 2022. Insolvency related activity includes Creditor Voluntary Liquidations, Company Voluntary Arrangements, administrations and creditors’ meetings. The data also showed that the South East had the highest number of firms in liquidation with bad debts, 298, of any region in the UK outside of Greater London. Garry Lee, chair of R3’s Southern and Thames Valley region, said: “The economic situation remains volatile for businesses in the South East. “The prospect of the UK avoiding a recession may have given business confidence a boost in the round but many companies are still finding it tough going on a day to day basis. “Incremental falls in inflation will take time to feed through and ease cost pressures while the after-effects of the pandemic, Brexit and the end of government support will continue to have an impact for some time. “Much will depend on the Chancellor’s rapidly approaching Spring Budget and whether he feels able to announce any business friendly measures to help lift the burden on hard-pressed companies, entrepreneurs and SMEs.” Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “Business owners and directors in the South East are advised to remain vigilant. “Rising stock, problems paying staff or suppliers and cashflow issues are all signs a business is struggling. “Seeking advice from a qualified and regulated source as soon as issues show themselves gives more options, more time to make a decision and a better outcome than waiting until the situation became more severe.” The Creditsafe data also showed that there were 5,794 start-ups in the South East in February. This is down on the 6,128 in the month before but up slightly on the 5,695 in February 2022. The number of late payments for companies awaiting money rose to a total of 521,149 unpaid late invoices in February 2023 compared with 517,273 in January 2023. Furthermore, the number of companies owing money in excess of agreed credit terms increased slightly from 59924 in January to 60831 in February. Creditsafe is a multinational business intelligence expert with services including company credit scores and credit report information. R3’s Southern & Thames Valley region includes Buckinghamshire, Oxfordshire, Hampshire, the Isle of Wight and Berkshire. ENDS