The number of East of England companies at elevated risk of insolvency has held steady throughout 2019, with the eleven regional business sectors monitored by restructuring and insolvency trade body R3 either seeing their proportion of companies at elevated risk flattening or falling between June and July.
R3’s monthly statistics for July, compiled using Bureau Van Dijk’s Fame database, highlight that just over two-in-five businesses in the region – 44.4% – are now in the elevated insolvency risk band, equivalent to around 158,500 companies, and almost the same as the proportion at the start of this year (January: 45%).
The East of England sector which is proving to be more financially stable than the other local industries monitored by R3 is agriculture. Its insolvency risk has decreased by 1.2% on last month’s statistic, with the number of agricultural businesses in the elevated risk band standing at around 1,100, which is the lowest proportion of those monitored in the region at one-in-three (33.5%).
The East of England agriculture sector is also outperforming the UK average, with its elevated insolvency risk of 33.5% sitting almost four percentage points below the national statistic of 37.2%, the third lowest of any region of the UK.
R3 Eastern Chair Mark Upton, a partner at Ensors Chartered Accountants in Bury St Edmunds, said: “It is good to see insolvency risk stabilising in the East of England and a glimmer of positivity for the local business community. However, sizeable challenges still remain.
“Throughout 2019, local companies have faced a raft of challenges, including preparations for Brexit, the National Living Wage, exchange rate fluctuations and increases in rent and rates. The R3 research highlights the importance of planning for such eventualities and monitoring company finances carefully.
“The key to business survival is to take relevant professional advice at the first sign of significant financial difficulties. When R3’s members are called in to help early enough, much can be done to rescue and support businesses beyond traditional insolvency solutions.”
Photo: R3 Eastern Chair Mark Upton, partner at Ensors Chartered Accountants. [Photographer/Copyright: Roger Barcham, BMS Imaging]