Zombie company numbers set to reach record high

23rd June 2022

Business recovery group Begbies Traynor has warned that the number of zombie companies is set to reach a record high.

Zombie firms are usually defined as low-growth or heavily-indebted firms barely able to cover interest payments on company debt.

Companies are also grappling with soaring energy bills, diminishing consumer confidence and supply chain shocks caused by the war in Ukraine.

Julie Palmer, Partner at Begbies Traynor, said the number of firms showing significant financial distress was likely to surpass the peak of 725,000 seen during the pandemic. “That figure definitely looks like being exceeded.”

“Given the high levels of employment at the moment, there might never be a better time to let the zombies fall over. They are bad for the economy. They suck capital away from more efficient businesses and end up costing us more in the long term.”