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Latest corporate insolvency figures show Scotland’s small firms faring worst

- KPMG say latest figures show larger companies are more stable

Figures released today (Friday 15th July, 2011) by professional services firm KPMG show the total number of Scottish corporate insolvency appointments rose by 17% in Q2 2011 when compared to both the previous quarter (from 282 to 329) and compared to the same period the previous year (329 compared with 280).

 

The statistics also show the number of administrations and receivership appointments, which usually affect larger businesses, made in Scotland fell by 19% between April and June 2011 compared with the previous quarter, with 43 appointments this quarter compared with 52 in Q1 2011. The latest figure is also down by 5% on the same period last year (43 compared with 45).

 

Meanwhile comparing Q2 2011 figures with Q2 2010 the figures illustrate a 22% increase in the number of liquidations, which typically affect smaller companies (286 compared with 235). When comparing Q2 with Q1 2011 there was a 24% increase in liquidations (286 compared with 230).

 

Commenting, Blair Nimmo, head of restructuring for KPMG in Scotland, said:

 

“These are still tough times for smaller businesses and while the headline figures may look disturbing, further analysis highlights fewer problems for larger companies of say more than 20 employees, which has to be good news.

 

“2011 has in general been much quieter for corporate restructuring than 2010 and we have found the trading performance of some previously underperforming businesses has been improving.  Also, despite the common view to the contrary, even in certain distressed situations, new funding can be found.

 

“By now most companies accept their markets are unlikely to materially improve in the short term and therefore remain focussed on keeping their costs tight and preserving cash until they have greater confidence in the direction of the economy.  This has meant that so far despite the tax increases, spending cuts and overall lack of confidence, we have not seen the dramatic impact some have predicted.”