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Business insolvencies fall

Published On 9 May 2007 at 10:57:48

Fewer companies - including small and medium-sized enterprises (SMEs) - went into liquidation in the first quarter of the year, new figures suggest.

According to data published by the Insolvency Service, there were 3,113 liquidations in England and Wales in the first quarter of 2007 - 2.8 per cent less than in the previous quarter.

Compared to figures for the same period last year, insolvencies among businesses fell by 11.6 per cent.

Overall, there were 1,392 compulsory liquidations and 1,721 creditors voluntary liquidations in the three-month period.

However, Malcolm Shierson, a corporate recovery and reorganisation partner at Grant Thornton, said that the data was more complex than it might initially appear.

"While at first glance these figures may suggest relative buoyancy among UK corporates, other than for a natural company churn in the economy, it is not all that it seems," he warned.

"In the past the insolvency statistics were a good indicator of the health of corporate UK, however, these days a more accurate indicator would be the level of restructuring activity and profit warnings.

"To read into the insolvency statistics that UK corporate health is rosy would not be entirely correct," Mr Shierson concluded.

 

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