Lancashire region sees levels of business distress stabilise
Levels of financial distress amongst businesses in Lancashire appear to be stabilising, according to fresh Red Flag Alert data released by Begbies Traynor.
8,696 companies in Lancashire experienced significant financial distress at the end of December 2019 (up 1% from 8,573 on the previous year).
The difference between distress volumes compared to the previous quarter (Q3 2019) was just one single business. (from 8,695 to 8,696).
Despite this relative stability, some key sectors of the regional economy are still facing major challenges and company directors are being urged to take swift action if they fall into trouble.
Of the 22 business sectors in Lancashire researched by Begbies Traynor, 10 of them experienced increased significant financial distress in the final quarter of 2019.
Perhaps unsurprisingly, following the collapse of Thomas Cook, Travel & Tourism saw the biggest year-on-year increase of 21% (82 compared to 68 at the same time the previous year). Real Estate & Property followed with a 16% increase (from 785 to 908 companies) and Support Services saw a 6% increase (1,104 to 1,175 companies).
Ian McCulloch, partner at Begbies Traynor in Preston, said: “These figures should be cautiously welcomed as it appears Lancashire is faring better than other regions of the UK. It doesn’t mean that everything is rosy in the regional economy and there are still many firms who are just about surviving.
“Uncertainty about the outcome of the General Election in the final quarter of 2019 may have been a key factor in forcing many companies into a tough position. Now that the Government is settled for the next five years and we know Brexit will happen on 31 January, there is at least some kind of political stability for companies to build on.
“Business owners will also still be hoping for some highly positive news in the most eagerly anticipated Budget for a number of years in March. Tax breaks and other financial incentives are keenly expected by most entrepreneurs.
“Company directors who find themselves in financial difficulty are always much better placed to bounce back if they take swift action and are proactive about getting professional insolvency or restructuring advice.”