Levels of ‘critical’ financial distress among UK businesses dropped 1% at the end of 2013 boosted by the Christmas period, according to the most recent Red Flag Alert issued by Begbies Traynor.
The number of businesses deemed to have ‘critical’ financial problems by the criteria of the report fell from 2,951 in Q3 to 2,933 in Q4 2013, following a 2% drop between Q3 and Q2 and a 9% decrease between Q1 and Q2.
Businesses in consumer-facing industries were boosted over the Christmas period, experiencing the most positive change in health, with ‘critical’ distress levels dropping in the hotel (24%), food retailing (22%) and general retailing (7%) sectors.
Julie Palmer, partner at Begbies Traynor, said: “Christmas came late for UK retailers in 2013, as consumers more than ever left their festive shopping to the last minute, taking advantage of the growing number of reliable next-day delivery and click-and-collect services offered by the best in class online and high street retailers.
“Still, UK consumers refused to scrimp this festive season, resulting in positive increases in sales volumes among food and general retailers compared to the previous quarter.”
Year on year, levels of ‘critical’ distress fell a total of 4% from 3,044 in Q2 2012.
The financial services sector saw ‘critical’ financial distress drop 21%, professional services by 12% and support services by 11% over the 12 month period.
Palmer said: ““After a slow third quarter, the important UK services sectors finished the year strongly with increasing confidence, resulting in improved M&A opportunities, as well as a return of investor confidence due to an improving stock market, providing a boon to the professional and financial services sectors.”