South East: Pubs face greatest insolvency risk level

Pubs in the South East face the highest elevated risk of insolvency in the UK, according to new research from insolvency and restructuring trade body R3.

More than a third (37.8%) are rated with a higher than average risk of insolvency in R3’s December risk tracker.

This is greater than the UK average of 33.3% for the pub sector and nearly three percentage points above the next highest regions, Northern Ireland and Wales (35%).

The North East shows the best performance of all regions with 28% of its pubs at a greater than normal risk of insolvency.

Although the pubs trade in the South East has the highest elevated risk for its sector in the UK, it compares favourably to other sectors within its own region.

Nearly half (49.6%) of professional services companies based in the South East were again deemed to be at greater than normal risk of insolvency –  a slight rise from the figure of 49.3% in November .

This was the highest for any sector in the South East region – and for any sector in any region of the UK of those tracked by R3.

Following on from professional services, the next sectors showing an elevated risk of insolvency in the South East were technology & IT (47.2%), construction (47.1%) and retail (40.4%) followed by tourism (40.3%), transport & haulage (40%) and manufacturing (38.3%.)

On a positive note, hotels (36.2%), restaurants (35%) and agriculture (34.3%) showed the lowest sector percentages in the South East.

However, as a region the South East was above the UK average for elevated risk in 10 out of the 11 sectors in R3’s insolvency tracker. Only agriculture bucked the trend.

The South East average for all sectors (44.8%) was the highest for any region in the UK and well above the UK national average figure of 41.1%.

Garry Lee, chairman of R3’s Southern & Thames Valley Committee, said: “The vast majority of sectors held steady in R3’s latest insolvency risk tracker.

“Although the South East again outstrips other regions for elevated risk across all sectors, this part of the country is one of the dynamos of the UK economy so some volatility is to be expected.

“The pub sector in general has its own well documented challenges and will be hoping for a strong trading performance over the festive period, as will the retail, restaurant and hotel sectors.

“This can be a critical time of year for many companies when issues surrounding cashflow, productivity, logistics and business continuity can all surface.”