Company liquidations have edged up in the first quarter of 2011, with 4,121 companies being subject to winding-up orders. Compulsory liquidations fell by more than 10 per cent compared with the same quarter in 2010, but creditors’ voluntary liquidations increased by more than 11 per cent.
The number of receiverships, company voluntary arrangements and appointments of administrators also fell compared with the first quarter of 2010, but increased compared with the previous quarter. Leading retail chains Habitat and Focus were among many to reach the end of the line.
The first quarter of the year is traditionally the toughest for hospitality and retail-based businesses and the dreadful weather in January was an extra blow to many. Problems may have been compounded by HM Revenue and Customs taking a harder line on ‘time to pay’ agreements. Recent evidence that small firms are finding obtaining adequate bank finance a problem (a recent poll showed that more than half of small businesses experienced difficulties obtaining adequate finance and more than a third of loan applications were turned down) also indicates that business faces some hard times ahead. A recent survey carried out by the Institute of Chartered Accountants in England and Wales showed that customer demand is still the dominant concern of most businesses and late payment by debtors is also an issue. Unsurprisingly, the retail and construction sectors are the most pessimistic.
On the plus side, individual insolvencies were sharply down and confidence in the property sector is rising.
Insolvencies Edge Up
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