By Daniel Hunter
PwC analysis of today’s (Friday) national corporate insolvency statistics found the number of company failures has decreased significantly, despite the high profile casualties on the UK high street.
4,613 companies entered insolvency in the first quarter of 2013. This is a decrease of 20% on the same quarter of 2012 when 5772 businesses failed. This also represents a 1.9 % decrease compared to the previous quarter of 2012 when 4696 businesses collapsed.
The number of administrations has decreased by more than 28% as 557 businesses failed during the quarter compared to 779 in the first three months of 2012.
There were also slightly fewer Company Voluntary Arrangements (CVAs) in Q1 2013 in relation to previous quarters. 142 companies entered CVAs compared to 151 in Q4 2012 and 175 in Q1 2012.
"The decrease in corporate insolvencies continues the trend seen over recent quarters. The first quarter has historically been the peak for insolvencies. However, corporate failures at such low levels- particularly of administrations- have not been seen since 2005 and before," Mike Jervis, business recovery partner at PwC, said.
"This is in spite of the many high profile retail casualties that collapsed during the first quarter. In fact, the total number of retail insolvencies fell by 47% between Q1 2013 and the same quarter of 2012.
"Reading between the lines with these numbers, it shows that stakeholders are supportive of companies in distress and are willing to consider non-insolvency solutions for these companies. What we can't glean from these numbers is a clear message that the economy is out of the woods. The dual impacts of continuing lack of growth and austerity measures will continue to produce casualties.”
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