Nearly 9,000 firms in Lancashire in significant distress
Fresh research from Preston-based insolvency experts Begbies Traynor reveals there are now almost 9,000 Lancashire businesses in significant financial distress.
The Red Flag Alert data for Q2 2019, which monitors the financial health of companies in Lancashire, found 8,585 businesses were experiencing significant distress at the end of June 2019 – a 1% increase on the same period last year.
The average figure for company debt has also doubled to £66,226 a year, from £29,872 in 2016.
Construction is the sector showing the highest levels of business distress in Lancashire with 1,239 businesses said to be in ‘significant distress’, followed by Support Services (1,156), and Real Estate & Property (845).
This means that more than 2,000 firms in the property and construction sector in Lancashire are now in distress – representing a 16% year-on-year increase across these two sectors.
Ian McCulloch, partner in the Preston office of Begbies Traynor, said: “These statistics reveal the scale of the challenge for SMEs in our region. The volume of firms in distress in key sectors in Lancashire like property and construction is alarming.
“Political uncertainty is one of the reasons why many companies have said they are suffering. Now we already have complete clarity on Boris Johnson becoming our new Prime Minister, we are all now looking for certainty on the Brexit position.
“We have to remember that while an average debt of £66,000 doesn’t seem much to large companies, this can be of significant detriment to the SMEs in Lancashire; many of which are currently struggling.”
Red Flag Alert has been measuring and reporting corporate financial distress since 2004, and over that time has become an industry benchmark of the underlying health of companies across every sector and region of the UK.
Through its unique algorithm, the Red Flag Alert measures corporate distress signals, drawing on factual legal and financial data from a wide range of relevant sources, including intelligence from the UK’s leading insolvency business, Begbies Traynor.