Mon, 12 Jul 2021 | BUSINESS NEWS
An analysis of new government figures has revealed that corporate insolvencies in the UK fell by more than half during the first six months of the year in comparison to the same period in 2020. The analysis, from Interpath Advisory, showed 301 companies falling into insolvency during the first half the year, compared to 655 in the first half of last year.
The sharp drop has again raised concerns that government support schemes during the COVID-19 pandemic have been propping up “zombie companies” and that the withdrawal of support schemes, such as furlough, could lead to a huge wave of insolvencies. New data has also revealed that emergency government-backed loans for UK companies during the pandemic have totalled close to £80 billion.
Interpath Advisory’s analysis of notices posted in The Gazette showed that business collapses reached particular lows in May and June of this year – with just 32 insolvencies in each month.
Regarding the issue of “zombie companies”, Interpath Advisory chief executive Blair Nimmo said: “The dichotomy of having historically-low insolvency rates at a time of significant economic crisis is naturally prompting concern in some quarters that the taxpayer is propping up an army of zombie companies.”
“But while it is fair to say that insolvencies are being supressed artificially thanks to the raft of support available, we also know there are lots of good businesses out there whose balance sheets are broken solely due to the impact of the pandemic – so it is only right they continue to be given the time and the support to be able to build their way back out of the crisis.”
Mr Nimmo said that “while insolvency practitioners will inevitably get busier”, as support schemes like furlough are withdrawn, "I don’t think we will see the deluge of corporate failures that many have predicted.”
Mr Nimmo also said that some firms could see their post-COVID recovery impacted by rising inflation and shortages of raw materials and labour. However, he added that companies could tap into increasing consumer demand as lockdown eases to raise their prices and provide a valuable boost to cashflow and profits.
View the latest distressed UK businesses here.
Two interrelated companies for combined sale providing a comprehensive range of paper products, mainly till rolls and credit card machine rolls. Additionally, the Companies supply complementary products, including ink ribbons for EPOS Systems, kitche...
This sale presents an exciting opportunity to acquire a proven manufacturer with a well-established network of commercial and private clients. Good track record of sales across 70 countries, including the USA, with the product proving to be a popular...
Provides bespoke electrical installations for a diverse range of clients throughout the UK. All employees benefit from ongoing training to ensure the business’s services are provided in line with the latest industry legislation, working alongside cli...
29
|
Mar
|
Caravan and motorhome retailer acquired out of administration | BUSINESS SALE
Administrators have completed the sale of a caravan and moto...
29
|
Mar
|
Financial planning business acquires Staffordshire company | BUSINESS SALE
Wren Sterling, a national financial planning business, has c...
28
|
Mar
|
NI pharmacy group acquires third site | BUSINESS SALE
A family-run community pharmacy group has expanded with the ...
29
|
Mar
|
Financial planning business acquires Staffordshire company | BUSINESS SALE
Wren Sterling, a national financial planning business, has c...
29
|
Mar
|
Caravan and motorhome retailer acquired out of administration | BUSINESS SALE
Administrators have completed the sale of a caravan and moto...
28
|
Mar
|
Food service business acquired at more than 10x profits | BUSINESS SALE
Total Foodservice, a wholesale catering supplies business, h...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.