Fewer companies went bust in England and Wales in the second quarter than in the first three months of 2019, according to professional services firm KPMG, despite a handful of high profile business collapses.
The number of firms going into administration fell by 14 per cent to 310 between April and June 2019, a study by KPMG of notices in the London Gazette showed.
“You could be forgiven for thinking there had been a dramatic increase in corporate insolvencies,” said Blair Nimmo, head of restructuring for KPMG UK.
High street name Bathstore was one of the well-known firms to collapse in the second quarter of the year. Jamie Oliver’s Italian restaurant chain was another business that failed, costing 1,000 people their jobs.
But the number of retailers going into administration remained relatively flat, falling from 28 in the first quarter to 26 in the second.
However, there was a more pronounced increase in the number of businesses in the food and drink sector entering into administration – 18 failed in the second quarter compared to 13 in the previous three months.
“It’s perhaps too soon to say whether the modest spike in food and drink insolvencies is a one-off or the start of a longer-term trend,” said Steve Elsigood, restructuring director at KPMG.
But he said businesses are “under significant pressure” due to more expensive “ingredients, packaging, labour and power”.
Nimmo said: “Prolonged uncertainty around Brexit has perhaps further delayed a ‘moment of truth’ for companies in those sectors which are more vulnerable to economic volatility.”
“Our advice [to companies] is to maximise reserves, keep refreshing those contingency plans and wherever possible, always plan for a worst case scenario.”