Research reveals number of administration appointments smallest since Q4 2007
Administration appointments in England are at the lowest level since Q4 2007, according to research from Baker Tilly Restructuring and Recovery LLP.
Figures taken from the second quarter of 2011 reveal that there were 553 administrations during this period, a 14 per cent drop from Q1 2011 and 13 per cent less than Q2 2010.
The numbers were taken from advertised administration appointments in The London Gazette.
Businesses in the service industry were most likely to file for administration in Q2, with a quarter of the total appointments listed during the period operating in this sector. Retail and manufacturing companies each contributed 15 per cent to the total number of administrations.
Martin Walmsley, head of debtor insurance at Lloyds TSB Commercial Finance, believes that the figures will continue to fall, as management teams increasingly turn to restructuring to avoid insolvency.
“These figures from Baker Tilly are a step in the right direction for the recovering economy and, despite the recent spate of high profile retail insolvencies, there are reasons for businesses to be positive about the future”, said Martin.
“Firms are more often restructuring to avoid liquidation and improving trading conditions mean that insolvency is no longer the only option for struggling companies, as the number of potential investors and trade acquirers continue to increase. This was evident recently with B&Q’s purchase of the struggling DIY chain Focus.
“To ensure a business is in a strong position to grow, credit insurance, such as our debtor insurance policy, safeguards the value of up to 90 per cent of issued invoices. This protects the debtor from potential customer insolvency and protracted payment, bolstering long-term expansion plans.”