Insolvency numbers remain flat during Q1 | KPMG | UK
Share with your friends

Insolvency numbers remain flat during Q1, but are headwinds gathering for consumer-facing businesses?

Insolvency numbers remain flat during Q1

The number of companies falling into administration across England and Wales remained broadly flat during the first quarter of 2017, despite the year-on-year picture showing a gradual uptick in corporate insolvencies.


Also on

Analysis by KPMG of notices in the London Gazette shows that the number of companies entering administration nudged up from 294 in Q4 2016 to 297 in Q1 2017 – albeit a slightly bigger jump from the 277 insolvencies seen during Q1 2016.

While the quarterly increase is extremely small in relative terms, Blair Nimmo, head of Restructuring at KPMG, believes this gradual uptick in insolvencies over the last 12 months may be symptomatic of increasing economic and geo-political uncertainty, as consumer confidence starts to waver in the face of price inflation, continued volatility in the currency markets and the nearing of the UK’s exit from the EU. 

He said: “While we’re still seeing what I would call ‘business as usual’ levels of insolvencies, the steady creep in numbers that we’ve witnessed over the last 12 months may be indicative that economic pressures are starting to bite. In particular, the high-profile administrations of numerous retailers seen during the first quarter of the year are good examples of how those consumer-facing businesses which are having to contend with fragile consumer confidence and rising raw material costs are coming under a degree of stress.”

In total, 28 retailers went into administration during the first quarter of the year, including high street names such as Jaeger, Agent Provocateur, Brantano and Jones Bootmaker.  

Blair Nimmo continued: “There is currently a cocktail of factors causing headaches for consumer-facing businesses. Rising prices and lacklustre wage growth, coupled with high levels of household debt, is dampening consumer desire to spend. Simultaneously, the impact of higher import costs, the new national Living Wage and business rate rises are only serving to compound the squeeze. I therefore wouldn’t be surprised to see few more casualties on the high street over the months ahead – and not just retailers; businesses in the casual dining and leisure sectorscould also be affected.

“That said, I don’t expect overall insolvency numbers to suddenly spike over the coming months. Despite increasing uncertainty with the General Election and the triggering of Article 50, economic conditions remain relatively benign, and there is a resilience across our corporate base that should stand most firms in good stead.”  

Other sectors to witness notable insolvencies during Q1 2017 include building & construction, recruitment and companies from across the supply chain - for instance, logistics, warehousing and manufacturers. In particular, furniture and packagingmanufacturers were particularly prominent in this quarter's numbers.

Blair Nimmo added: “Looking north of the border to Scotland, where insolvency levels have actually fallen this quarter, we have seen some stability return to the oil and gas sector. While there remains some critical issues, at no point over the past three years have we experienced the level of insolvencies which might have been expected given the drastic reduction in the oil price. The general consensus is that the oil price has broadly bottomed out, subject to any unforeseen events. That being said, we are working with a number of oil and gas firms, albeit in a more stable environment, in areas such as working capital management, where often we are finding significant scope for improvement at very little cost to the business.”




For press enquiries only, please contact:

Katy Broomhead, Senior PR Manager, KPMG

T: 0161 246 4623
M: 07824 537963


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff.  The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

Connect with us


Request for proposal