South East: Insolvency risks decrease despite Brexit uncertainty

Ten business sectors in the South East reported a fall or hold in their risk of insolvency, according to the latest research from R3, the insolvency and restructuring trade body.

R3’s research, which is compiled from Bureau van Dijk’s Fame database of company information, looks at the levels of insolvency risk of  companies in 11 business sectors across the UK.

July’s findings saw the South East’s tourism operators experiencing the largest fall in companies judged to be at greater than usual risk of insolvency between June and July, with a reduction of 1.3% in the month-on-month figures.

And the South East’s manufacturing businesses experienced relative stability in terms of the proportion of companies in the sector at above-average risk, with the percentage at 39.7%, compared to 39.8% in June.

Mike Pavitt, chair of R3 in the Southern region, said: “There’s been some worrying national data in the last few weeks indicating that Brexit uncertainty may be affecting the UK’s economy.

“But it appears that manufacturers in the South East are faring relatively well. Indeed, the region as a whole remains fairly buoyant, with over 80% of the sectors surveyed by R3 showing month-on-month decreases in elevated risk of insolvency.”

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Pavitt continued: “Despite the positive news for certain sectors, business owners and directors across all sectors should monitor their finances carefully, plan for all foreseeable eventualities (with a particular eye on the continued uncertainty surrounding Brexit), and keep careful records of their decision-making processes including the evidence upon which those decisions are based. It is vital to remain alert to signs of trouble and to be ready to adapt to the changing economic landscape.

“If in doubt, consulting qualified, regulated restructuring specialists as early as possible and acting on their advice will help to maximise the options for a business, increasing its chances of future survival and prosperity, while also mitigating the potential downsides for directors, should the business enter insolvency.”