Despite high profile insolvencies continuing to hit the headlines, the total number of companies in England and Wales entering into administration during the second quarter of 2018 fell sharply, according to new analysisfrom professional services firm KPMG.
A study by KPMG of notices in the London Gazette shows that a total of 302 companies went into administration between April and June 2018, compared with 347 in the previous quarter - a fall of 13%; though the number was a modest increase on the 297 administrations seen during the same period in 2017.
Blair Nimmo, head of Restructuring for KPMG in the UK, said: “The drop in the number of administrations may come as a surprise to many who have followed the tribulations of certain well-known high street brands. Nevertheless, when put in the context of year-on-year trends, the latest stats still represent relatively normal attrition rates.
“Of course, we continue to see companies in the casual dining and retail spaces battle hard in the face of changing consumer attitudes towards spending, coupled with increased costs as a result of the living wage and business rates pressures. Whilst a number of chains have survived through the implementation of successful CVAs or via pre-pack administrations, inevitably there have been site closures and job losses across many parts of the country.
“Additionally, the much-publicised pressures on the construction sector continue to impact businesses up and down the supply chain, both large and small.
“However, we’re also seeing new sectors start to come under more acute pressure - for instance, high street estate agents are presently facing an unprecedented set of challenges. The rise of online-only agencies have combined with falling house prices, a general slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for your average high street agent. I would therefore not be surprised to see operators across this sector struggle over the second half of the year and beyond.”
Blair Nimmo concluded: “Overall, however, the latest figures reflect a relatively positive picture for most businesses. For the most part, adopting a long-term cautious approach appears to be paying off for the majority of firms, although sectoral-specific challenges and broader global economic changes will inevitably force some businesses to reconsider their operations and potentially restructure their organisations to improve efficiencies.”
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operatesin 154 countries and territories and has 200,000 people 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.