Business
Latest Red Flag Alert Report for Q2 2019
Latest Red Flag Alert Report for Q2 2019.
About this update from Btg Consulting Plc
[{"type":"text","content":"\n \nRNS Number : 0946H Begbies Traynor Group PLC 30 July 2019 \n\n \n \n484,000 businesses in significant distress as consumer facing sectors falter\n \n· Number of businesses in significant distress now 484,000 - 14% of all economically active UK businesses.\n· Average insolvent company debt increases by 122% in past three years to £66,000 \n· Businesses in 'critical' financial distress increases 5%\n \nNew research from Begbies Traynor, the UK's leading independent insolvency firm, reveals there are now 484,000 UK businesses in significant financial distress with the property, leisure and tourism sectors particularly badly affected. \n \nThe Red Flag Alert data for Q2 2019, which monitors the financial health of UK companies, found that 14% of all UK businesses were experiencing 'significant' financial distress at the end of June 2019, with the average debt of insolvent companies more than doubling to £66,226 a year, from £29,872 in 2016. There was also a marked increase in the number of businesses in critical financial distress during the same period - often a precursor to formal insolvency - with a rise of 5% year-on-year. \n \nLow consumer spending impacting business\n \nBusinesses reliant on the consumer economy continued to be impacted by falling sales which has affected financial performance across a number of key verticals. The latest Red Flag Alert research highlights rising financial distress in the following sectors; hotels & accommodation (8% rise, 5,095 (Q2 2018) to 5,516 (Q2 2019), sport & health clubs (5% rise, 8,481 (Q2 2018) to 8,940 (Q2 2019) and leisure & cultural activities (4% rise, 12,524 (Q2 2018) to 13,069 (Q2 2019). Additionally the online retail sector (sales via mail order or the internet) experienced a 12% increase in significant financial distress from 5,243 in Q2 2018 to 5,871 in Q2 2019. \n \nAdditionally, businesses indirectly reliant on the health of the consumer economy continued to be hit hard with real estate and property companies most affected by the weakest consumer spending since records began in the mid-1990s. This sector saw a 15% year-on-year increase in the number of companies in significant financial distress, rising fro...