BusinessCompany NewsBusiness suffers effects of war

Business suffers effects of war

Business confidence has taken a battering because of the war, exacerbating the economic downturn, and causing a rise in business failures which have led to insolvency firms recruiting extra staff to cope with the increased workload.

Link: War forces write downs for seismic data industry

The economy, already weakened by the global downturn, suffered a further slowdown in the run-up to the war and put many businesses under pressure. And although most insolvency practitioners say it is too early to see businesses fail directly because of the war, evidence of war-related insolvencies is beginning to trickle in.

The most troubled companies are in the tourist and travel sectors, which have been suffering since September 11, but have seen a further drop in trade due to the war.

‘The travel industry has been suffering as a direct result of the war and the economic uncertainties in the period leading up to the start of the hostilities,’ said Maurice Moses, managing director of Numerica’s business recovery group.

‘Tour operators contract for flights and hotel stock. They are being forced to discount product heavily in order to stimulate demand and attract bookings,’ he added.

Brian Callaghan, head of business recovery at Chantrey Vellacott DFK, said he had seen ‘signs of the downturn kicking in both in terms of the practice and our client base’.

He added the current picture was poles apart from that of the 1990s.

‘What is so different,’ he said, ‘is interest rates are low, so companies don’t have masses to pay on their debts. But the war is doing nothing in terms of confidence in the economy.’

Martin Freeman of Griffins insolvency firm said that, although he had seen no particular increase in distressed companies due to the war, the firm was recruiting extra insolvency staff ‘because we expect there to be a downturn’.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor