Gloomy outlook as Brexit uncertainty sees UK insolvencies jump by 35 per cent
Restaurants, travel firms and construction companies all feature on the list of victims
The number of UK companies entering administration has risen by more than a third in the past three months.
According to research by accountancy firm KPMG, a total of 417 companies went into administration in the third quarter, compared with 310 in the second quarter.
The construction industry was the hardest hit, with administrations up by more than 50 per cent. The number of insolvencies rose from 49 to 76, with Pochin being one of the high-profile victims.
The number of restaurants, pubs and clubs that fell into administration was also high, with figures nearly doubling. Licensed restaurants accounted for 14 out of the 26 insolvencies, including Spud-U-Like and Cabana Restaurants.
The travel industry saw Super Break and Late Rooms shutting down. Thomas Cook was not included in the report, as it went into compulsory liquidation rather than administration.
The number of retailers facing insolvency fell from 26 in Q2 to 18 in Q3. However, a number of big brands went out of business, including Jack Wills and Karen Millen.
Blair Nimmo, head of restructuring for KPMG UK, said: “For some time now, corporate insolvencies have been ticking along at fairly steady levels, so the more marked increase in administrations seen last quarter may herald the start of a new wave of activity. This is perhaps unsurprising, given the challenges presented by fragile consumer confidence, rising overheads from fluctuations in exchange rates, increasing employment costs and general political uncertainty.”
Manufacturing is also under a cloud, according to a separate report by the Confederation of British Industry (CBI). The survey of 258 manufacturing firms showed that prospects are “downbeat”, with firms anticipating output will deteriorate at a slightly faster rate in the fourth quarter.
Concerns over Brexit have also led factory owners to cut back on investment in 2020 and limit exports, while new orders are expected to fall at a faster pace in the coming months.
Tom Crotty, group director of INEOS and chair of CBI Manufacturing Council, said:
“With Brexit reaching a critical crossroads, these gloomy results are unsurprising yet still very concerning. Most tellingly, manufacturers’ investment intentions across buildings, machinery and skills are at their worst since the dark days of the financial crisis.
“Manufacturers will be closely watching developments in Brussels and Westminster over the coming days and hoping that policymakers can avert a disastrous no-deal exit. If they fail, then we could be looking at a far gloomier outlook for our sector in the coming months.”