Value of companies in administration hits £8bn

The figure represents the turnover of companies filing group or full accounts that have entered administration or administrative receivership in the first two months of 2009. Total turnover for similar companies entering administration in same period last year was only £2bn.

However, the number of appointments taken on by insolvency specialists has remained broadly the same, despite the increase. Begbies Traynor was appointed to 66 administrations for Jan/Feb 2009 compared to 72 a year earlier. Tenon has 35 compared to 44, while Vantis has 30 compared to 20. Other firms posted similar figures year-on-year. Eleven firms were responsible for appointing IPs to 304 of the 661 administrations.

‘We’ve seen a lot of big, well-known names collapse, and are now seeing that in manufacturing as well,’ said Mercer & Hole insolvency partner Chris Laughton.

The number of administrations and administrative receiverships filed was 661 for Jan/Feb 2009, compared to 647 a year earlier. IPs said many businesses which would have entered administration last year were now going straight into liquidation.

‘There are more liquidations because there’s no funding to buy or save anything,’ said Laughton.

Larger businesses, which would have traditionally avoided insolvency, have plugged the gap left by companies entering liquidation.

‘Bigger companies never had to go through insolvency, now they have no choice,’ said Begbies Traynor senior partner Nick Hood. ‘The carnage is focused on the top at the moment.’

Top 25 firm Wilkins Kennedy projects liquidations to reach nearly 24,000 for the year ending 31 March 2009, which would be the highest figure since 1992/93.

‘Liquidations tend to peak as the economy emerges from a recession, so we could see even more companies shutting up shop as those weakened finally succumb,’ said Wilkins Kennedy insolvency partner Keith Stevens.