Deloitte: Administrations at pre-credit crunch low

Administrations have dropped to a pre-credit crunch low for the first half of
this year, according to figures released by Deloitte.

The first half (H1) of 2010 saw a 43% decline in corporate administrations
compared with the same period last year, and a 25% drop compared with the same
timeframe in 2006.

According to research from Deloitte the first six months of 2010 had just
1,065 administrations – a pre-credit crunch low. Administrations in H1 2008
reached 1,440; 2007 1,205, and 2006 1,419.

Lee Manning, reorganisation services partner at Deloitte, said: “We are
seeing a steady decline in administrations and this is certainly a positive sign
that the climate is stabilising. I would be very surprised if administration
levels increased dramatically this year; rather I would expect the second half
to mirror the levels of activity we’ve seen in H1.

“Clearly the economic situation will remain challenging and whilst increased
VAT in the new year won’t have a material impact on the prices of most products,
this won’t help consumer confidence either.”

Retail was badly hit by the recession but has also seen administrations fall
57% in H1 2010 compared with the same period in 2009.

Lee said the decline was due to “successful” discussions with landlords to
spread the burden of rent and the increase in alternatives such as company
voluntary arrangements – where the business arranges to repay a percentage of
its debt whilst continuing to trade.

Further reading:

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