UK faces insolvency 'epidemic' in 2009
Insolvency specialist says it has seen a surge in approaches from struggling businesses
The UK faces an ‘epidemic’ of business failures next year, with companies in
the retail, motor and property sectors most at risk, a leading insolvency
specialist has warned.
As the economic downturn deepens Tenon Recovery said calls for assistance
from companies in the retail, restaurant, motor industry, property and leisure
industries in the last two months were nearly 200% higher than the same period
last year.
“We believe the symptoms we are seeing now are a precursor to a potential
epidemic of insolvencies in 2009,’ said Carl Jackson, head of Tenon Recovery.’It
is quite usual for some non-seasonal businesses to turn off the lights in the
run up to Christmas as they know they will not be able to survive in the New
Year but we have never seen such a broad spread of businesses fail so early.’
The primary characteristics of a troubled business include weak equity base,
low profit, losses, weak management, substantial debtors, and a high fixed cost
base, according to Tenon.
It has published a financial ‘health check’ to help struggling companies,
including advice on management information, management control and systems and
processes.
