East of England businesses facing heightened insolvency risk
Technology and retail firms in the East of England are facing a heightened risk of insolvency, according to new figures.
The Eastern branch of R3, the insolvency and restructuring body, found that 35% of tech and IT businesses face a higher risk of going out of business.
Only firms in the East Midlands have a greater risk of insolvency while 26% of retail businesses in the East – also the second highest proportion in the country –are facing difficulties.
Agricultural firms are performing strongly however, as fewer than one in six were found to be at heightened risk – the figure of 15.7% is 4% less than the UK average.
A mixed picture
R3 Eastern chairman Mark Upton highlighted the successful plight of technology firms in Cambridge but added that there are also those facing insolvency elsewhere in the region.
He urged businesses who are on the verge of insolvency to take action and to seek professional help, as corporate advisory services can help to point firms in the right direction.
“There are companies whose struggles are invisible to outside eyes, and it is not until they are no the brink of insolvency that their owners seek financial advice,” he explained.
With businesses facing a mixed future in many sectors, acting as quickly as possible can increase the likelihood of finding a positive outcome.
A similar situation in the North East
R3 data also reveals that levels of insolvency risk have been rising across nearly all sectors in the North East of England.
Nine of the 11 sectors covered by R3 saw their risk levels rise in the last month, with only the tourism sector remaining the same and the transport sector showing signs of improvement.
Insolvency risk in the leisure sector rose by 11% for hotels and 5% for pubs in May when compared to the month previously, while risk in the manufacturing and tech sectors climbed by 4%.
Around a quarter of businesses in the North East currently face a heightened risk of entering insolvency in the next 12 months, which is broadly on par with the average across the UK.
By Phil Smith