Company administrations and receiverships fall over past year
Insolvency Index: figures show mixed picture, with year-on-year rise in liquidations in UK
The Exaro Insolvency Index presents a detailed breakdown of UK company failures – a key economic indicator
Analysis by Exaro shows that the number of UK companies going into administration or receivership is falling this year compared to 2012.
The total number of administrations and receiverships fell by just over a fifth in the three months to April compared with the same period last year, in a sign of an improving business environment.
But the analysis also shows the ongoing legacy of the worst recession for decades, with liquidators being appointed to an increasing number of companies.
In February to April last year, 753 companies registered in the UK went into administration or receivership, but the figure fell by 21.5 per cent to 591 for the same three months this year.
The figure for April alone stands at 192, down by 11.9 per cent from the same month last year, which saw 218 companies going into administration or receivership.
The falls are shown in the first two graphs to the right, which can be clicked to enlarge.
The trend has been identified in the inaugural Exaro Insolvency Index, which will track insolvencies every month throughout the UK – and across different business sectors.
The Exaro Insolvency Index provides a detailed breakdown of UK company failures – a key economic indicator.
The analysis is based on insolvency notices as they are published in the London, Belfast and Edinburgh Gazettes. Insolvency notices must be submitted to these publications to cover the whole of the UK.
Companies that went into administration in the three months to April 2013 included the fashion chain, Republic.
Leeds-based Republic, which was launched in 1986 under the Best Jeans name, had 121 stores and around 2,500 staff when it went into administration.
Joint administrators, Hunter Kelly and Jonathan Sumpton, of Ernst & Young, were appointed in February. After two weeks, Sports Direct, itself a high-street chain, bought 116 Republic stores, the brand name and its head office.
The administrators for Republic said that the deal would “safeguard” more than 2,100 jobs.
Liquidators were appointed to 4,745 companies in February-April 2013, a rise of 3.1 per cent on the figure of 4,601 for the same period last year.
The rise was even sharper comparing just April this year – with liquidators appointed to 1,707 companies – with the same month in 2012, when the figure was 1,445. This marks a rise of 18.1 per cent.
Companies where liquidators were appointed in the period include the retailer, Clinton Cards, which went into administration in May last year. Administrators sold 400 of the chain’s 784 stores to a US card-making company, American Greetings, after a month.
Creditors appointed liquidators to what remained of Clinton Cards three weeks ago.
Petitions to wind up companies fell by 33 per cent in February-April 2013, compared with the same three months last year, decreasing from 2,391 to 1,603.
However, resolutions or court orders to wind up companies stayed fairly static, with 5,221 in the three months to April 2012 and 5,223 in the same quarter this year.
Mining and quarrying is the industrial sector that stands out with sharply rising insolvency figures, as shown in the final two graphs to the right.
The number of resolutions or court orders to wind up mining or quarrying companies rose more than fourfold, from 37 in the three months to April 2012 to 157 in the same period this year. The number of companies in this sector where liquidators were appointed increased by more than five times, from 27 to 147.
The figures for the single month of April for this year and for 2012 show a similar pattern. The number of resolutions or court orders to wind up companies rose more than fourfold, from 13 to 57. Companies where liquidators were appointed increased by more than five times, from 10 to 55.
Failures in the sector included The Scottish Coal Company, whose directors petitioned to wind up the company three weeks ago. Two insolvency practitioners at KPMG were appointed as interim liquidators last week.
The company was founded in 1994 following the privatisation of British Coal. It runs six open-cast coal mines in Scotland. According to KPMG, the company employed 732 people, but only 142 employees have been retained to “assist in securing” the company’s sites.
The Exaro Insolvency Index provides a detailed analysis of company failures in the UK – a key economic indicator. A bespoke service is available. If you are interested in buying a regular, specialised bulletin that enables you to track the data – including lists of company failures – in specific sectors or geographical areas, please e-mail firstname.lastname@example.org, putting in the subject line: Exaro Insolvency Index.
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