Credit, Collections & Insolvency News
New data has indicated that nearly 135,000 companies were showing strain this month, roughly three times the pre-pandemic average according to new analysis by Mazars.
Businesses in the services and retail sectors accounted for almost three-fifths of those showing distress, with sectors that are allowed to reopen faring better, with construction and manufacturing businesses making up 7.9 per cent and 6.7 per cent of those in distress respectively.
London accounts for just over a quarter of businesses in distress (25.58 per cent) followed by businesses more generally in the South East outside the M25 (18.44 per cent).
Paul Rouse, Partner at Mazars said “We are starting to see the significant financial impact of the pandemic and Brexit on companies across the UK, both private and listed. During more normal circumstances, we expect between 40,000 and 50,000 companies to trigger one of our negative health markers. Today- even with many government support measures still in place – we are seeing roughly three times that amount: 135,000.”
“Unfortunately, we predict that even at this higher rate that this is in fact the calm before the storm with further significant amounts of business distress likely to be experienced as support measures come to an end.”
“Geographically, London is the most affected – with over a quarter of our sample based in the capital (perhaps to be expected, given business density in the city). By comparison, those businesses in East Anglia and Northern Ireland have seemingly been impacted the least.”
“On a more positive note we are hopeful of being able to assist many of these businesses and avoid a potential boom in insolvencies if advice is sought quickly before the road back is too steep”
| Listed Business (PLC) Data | Data on 01 March 2021 | Data on 01 January 2020 | |||
| Category | Company Health (100 being the best) | Count | % | Count | % |
| Green | 50 + | 3,304 | 69.3% | 3,493 | 78.0% |
| Amber | 11 – 49 | 339 | 7.1% | 479 | 10.7% |
| Red | 10 or less | 64 | 1.3% | 162 | 3.6% |
| Red – Specific Reason | 10 or less | 1,063 | 22.3% | 343 | 7.7% |
| Total | 4,770 | 100% | 4,477 | 100% | |
| Average Score | 39 | 49 | |||
|
*Data Source Mazars RADAR |
|||||
*Red alert: normally Mazars expects around 40,000 companies to be in distress, today the figure is 134,437
| Region | Mazars Negative Health Marker | NHM % | Industry | Mazars Negative Health Marker | NHM % | |
| South East (inside M25) | 34,389 | 25.58% | Services | 50,503 | 37.57% | |
| South East (outside M25) | 24,793 | 18.44% | Retail | 28,255 | 21.02% | |
| West Midlands | 10,166 | 7.56% | Finance, Insurance & Property | 16,406 | 12.20% | |
| Yorkshire & Humberside | 9,254 | 6.88% | Construction | 10,610 | 7.89% | |
| East Midlands | 8,012 | 5.96% | Manufacturing | 8,934 | 6.65% | |
| Scotland | 7,566 | 5.63% | Transports, Communication & Utilities | 8,205 | 6.10% | |
| Wales | 7,560 | 5.62% | Wholesale | 5,600 | 4.17% | |
| South West | 7,369 | 5.48% | Public Administration | 4,073 | 3.03% | |
| North West | 6,939 | 5.16% | Agriculture, Forestry & Fishing | 1,352 | 1.01% | |
| Greater Manchester | 6,008 | 4.47% | Mining | 473 | 0.35% | |
| North | 4,169 | 3.10% | Unclassified | 26 | 0.02% | |
| Northern Ireland | 3,854 | 2.87% | ||||
| East Anglia | 3,351 | 2.49% | Grand Total | 134,437 | 100.00% | |
| Unclassified | 957 | 0.71% | ||||
| Channel Islands | 50 | 0.04% | ||||
| Grand Total | 134,437 | 100.00% |