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18.7% year-on-year fall in compulsory liquidations 3 August 2012

Businesses forced into compulsory liquidations fell by 18.7% in the second quarter of 2012 compared to the same period last year.

During April, May and June this year there were 4,115 compulsory liquidations and creditors’ voluntary liquidations in total across England and Wales on a seasonally adjusted basis.

The figures show the continuing pinch hitting the high street but also highlight a small but positive impact from the Olympics and the Royal Jubilee, according to commentators.

Overall, this was a fall of 3.6% from January, February and March 2012 and 2.4% less than the same quarter a year ago.

In total there were 1,040 compulsory liquidations, a drop of 13.9% on the first three months of 2012 and down on the same quarter of 2011.

There was also a sharp rise in compulsory voluntary agreements (CVAs) which in Q2 2011 stood at 187, but leapt 88.2% to 352 in the same period in 2012.

Although, this figure includes 104 CVAs which were part of the 156 companies in the Southern Cross Healthcare Group which went bust during the period.

There were also 3,075 creditors’ voluntary liquidations, which is very slightly up by 0.4% on the start of 2012 and increased marginally more by 4.6% on the corresponding quarter of the previous year.

Additionally, there were 1,310 other corporate insolvencies in Q2 of 2012, not seasonally adjusted, made up of 333 receiverships, 625 administrations and 352 company voluntary arrangements – in all an increase of 6.3% on the same three months a year ago.

Law firm Pinsent Masons restructuring partner Richard Williams said of the figures: “With high street retailers feeling the pinch or, as with Game, going under, and leisure giants such as Thomas Cook struggling, at the half way mark the quarter on quarter fall in corporate insolvencies is unlikely to continue for the remainder of the year.”

Insolvency trade body R3’s president Lee Manning said: “While retail is facing its own particular set of challenges, the big picture is corporate insolvency overall is down 3% on the previous quarter and 1% year on year. At least things are not getting worse, even if this feels counter-intuitive with the UK economy firmly back into a double dip recession and other threats from the Eurozone.”

He added: “However, the increase of 41% in CVAs (even discounting the 156 companies relating to Southern Cross) is intriguing and shows the rescue culture at forefront of people’s minds – with the creditor community arguable being more flexible.”

 

 

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