Business
Latest Red Flag Alert Report for Q2 2020
Latest Red Flag Alert Report for Q2 2020.
About this update from Btg Consulting Plc
[{"type":"text","content":"\n \n \n RNS Number : 9325T\n Begbies Traynor Group PLC\n 24 July 2020\n \n \n \n \n \n \n \n Seven consecutive quarters of rising financial distress leaves 527,000 UK businesses in a precarious position\n \n \n \n \n \n · \n \n Seven consecutive quarters of increasing financial distress recorded - longest period since start of 2014\n \n \n \n · \n \n 527,000 businesses in \"significant\" financial distress - increase of 33,000 since start of year\n \n \n \n · \n \n Significant financial distress rises 9% year on year, with real estate sector rising 19%\n \n \n \n \n \n \n \n \n \n The latest Red Flag Alert research for Q2 2020 has recorded seven consecutive quarters of increased financial impairment resulting in a record 527,000 businesses in significant* financial distress at the end of June 2020 - an increase of 33,000 since the beginning of the year.\n \n \n \n \n \n This newly published research from Begbies Traynor, also finds that this represents a considerable increase of 7% since the start of the year, and 9% year on year. The rise could have been much higher, were it not for reduced court activity due to the coronavirus pandemic which has substantially reduced the number of CCJs and winding up petitions being taken against indebted companies. \n \n \n \n \n \n Our own data shows there were 18,107 CCJs lodged against companies during March, April and May in 2019, with only 10,766 lodged in the same period during 2020, a fall of more than 40%. The situation is even more profound with regard to the more serious winding up petitions. During March, April and May 2019, 926 were lodged compared to 247 during the same period in 2020, a fall of 73%.\n \n \n \n \n \n Even though all 22 sectors (measured by the Red Flag Alert research) showed an increase in significant distress, it is likely that the true impact of the coronavirus pandemic will only become apparent during the third and fourth quarters of 2020 as government support initiatives are unwound and courts fully reopen so that enforcement action can be taken.\n \n \n \n \n \n Julie Palmer, Partner at Begbies Traynor, said: \n \n \n \n \n \n \"The latest figures from our Red Flag Alert research show that there is a\n dam of company financial distress waiting to break upon the UK economy. Despite more than 30...