Firms urged to seek advice with insolvencies on rise

The chair of the Midlands branch of insolvency and restructuring trade body R3 is urging directors of the region 's business leaders to seek advice if they are worried about their businesses - as corporate insolvency figures continue to soar compared to this time last year.

Figures published by the government 's Insolvency Service show that the number of companies entering insolvency decreased by 3.2 per cent in February to a total of 1,515 compared to January 's total of 1,565.

However, administrations increased to a 15-month high and overall levels of corporate insolvencies increased by 121.2 per cent compared to February 2021's figure of 685.

R3 Midlands chair Eddie Williams (pictured), a partner at PwC in Birmingham, said: “The increase in administrations suggests that there are several insolvent businesses which still have some prospect of rescue, given this is one of the main statutory purposes of the administration process.

“Wherever possible, the insolvency profession will work to secure the rescue of businesses in administration to help ensure better outcomes for the company, its staff and its creditors.

“It is evident that the ending of the peak of the pandemic and the lifting of the final set of restrictions has not led to the shot in the arm the business community had hoped for.

“Now is the time for directors to be alert to the signs of financial distress and to take the necessary action.

“We know conversations about finances are some of the hardest to have but speaking up about concerns at an early stage typically leads to a better outcome than holding back until the problem worsens. ”