Business
Latest Red Flag Alert Report for Q2 13
Latest Red Flag Alert Report for Q2 13.
About this update from Btg Consulting Plc
[{"type":"text","content":"\n \nRNS Number : 2698J Begbies Traynor Group PLC 15 July 2013 \n \n\nUK recovery accelerates with 39% decrease in 'Critical' distress\n \nSting in the tail - Chronically under-funded SME's at greatest risk of failure during recovery phase\n \nLatest Red Flag Alert Report for Q2 2013\n \nAccording to the latest Begbies Traynor Red Flag Alert research for Q2 2013, which monitors the financial health of \"Corporate UK\", levels of 'Critical' financial distress among UK businesses have fallen 39% compared to Q2 2012; the second highest year on year decrease since the beginning of 2011.\n \nAcross all sectors, UK businesses experiencing 'Critical' financial problems reduced from 4,947 in Q2 2012 to 3,001 in Q2 2013, indicating a significant turnaround in the health of the UK economy. On a quarterly basis, the improvement continued with levels of 'Critical' distress falling 9% from 3,283 in Q1 2013.\n \nThe number of UK businesses experiencing 'Significant' levels of financial distress remains high but is improving, albeit at a slower rate, reducing 18% year on year from 216,396 cases in Q2 2012 to 176,677 in Q2 2013, and on a quarterly basis falling 7% from 190,787 in Q1 2013.\n \nJulie Palmer, Partner at Begbies Traynor, commented: \"With critical distress levels falling at a record pace, this quarter's improvement appears to be the first real sign that the UK economy has turned a corner towards a sustained recovery. However we have real fears that many SMEs will have serious financial difficulties at the time they least expect - during a recovery. Our experience has shown time and time again that many SMEs run out of cash during the recovery phase, as there is a real temptation to overtrade.\n \n\"Many of these companies at risk have been labelled as \"Zombies\" in the past but, with the majority having survived the worst of the recession, they are now chronically under-funded; benefitting from low interest rates and improving confidence but in desperate need of finance and, crucially, guidance to help them take advantage of the dawning economic recovery in an unfamiliar post-crisis market.\n \n\"To begin the process of guiding these businesses back to health, Begbies Traynor is currently developing a five-point corporate health manifesto, which we hope will encourage further debate on...