Credit, Collections & Insolvency News
The latest official statistics show that corporate insolvencies in Scotland for the whole of 2019 were 4 percent up on the year before, at 980, putting them at their highest level since 2012.
However, the figures fell by 4% in October-December 2019 when compared with July-September 2019, and rose by 8% compared with October-December 2018.
Commenting on the Scottish Insolvency Statistics, October to December 2019, Tim Cooper, Chair of R3 in Scotland, the insolvency and restructuring trade body said “The higher level of corporate insolvencies in Scotland in 2019 compared with previous years is a worrying sign that conditions may be harshening for Scottish enterprises. The figures released today do not include administrations or company voluntary arrangements, either, meaning the true extent of Scottish business difficulties could be even higher.”
“If one word could be said to sum up 2019, there’s an argument to be made for it to be ‘uncertainty’. Brexit uncertainty led to many companies understandably taking a ‘wait and see’ approach on everything from new equipment to decisions about opening offices. This in turn added sand to the wheels of dealmaking and business investment, with knock-on effects for the economy as a whole.”
“Companies also had to cope with stop-start stockpiling over the course of 2019, as they prepared for the putative Brexit dates in March and then October. Increased levels of business activity before these dates were offset by slacker demand after them, as companies used up their stockpiles rather than ordering new inputs or products.”
“Unemployment is still below historic levels, although the size of the workforce shrank in the most recent figures, suggesting that many enterprises are wary of taking on new staff. Inflation was relatively low across 2019, while overall economic growth in Scotland was also muted, with the construction sector fairly anaemic, alongside well-publicised difficulties in the retail sector as consumers curbed their spending, also affecting leisure and hospitality businesses.”
“Minimum and living wages increased in 2019, along with the employer contribution to auto-enrolment pensions, while business rates continued to be a source of pain for many companies.”
“Against this backdrop, any business with its finances in reasonable shape is to be congratulated. It should also be added that external factors such as the economy or technological developments are only one side of the story, and within any sector there will be higher and lower performers. There is no harm at all in seeking new perspectives on how to improve cashflow and boost the bottom line through talking to a professional and regulated business adviser, such as an insolvency practitioner. If accessed early enough, the chances of business turnaround are greatly enhanced.”
