MARCH and April saw a 20 per cent increase in businesses going into administration across England and Wales, according to insolvency specialists FRP Advisory.
The number of administrations rose to 378 – 56 more than in January and February. FRP Advisory attributed much of the jump to poor sales over Christmas. Some groups may have struggled into 2013, but payments for the second quarter’s rent are falling short. Individual voluntary arrangements, settlements made to avoid bankruptcy, have also risen 15 per cent on the year.
Glyn Mummery, partner at FRP Advisory, saw an upside to some firms going under. “Zombie companies seem to be realising that they are in fact dead”, adding, “when an economy or market picks up, stressed businesses often then fail as there is insufficient working capital to meet demand”.