Business
Latest Red Flag Alert Report for Q4 2017
Latest Red Flag Alert Report for Q4 2017.
About this update from Btg Consulting Plc
[{"type":"text","content":"\n \nRNS Number : 0633C Begbies Traynor Group PLC 17 January 2018 \n\nHalf a million UK businesses start 2018 in 'Significant' financial distress\n \nNew research from Begbies Traynor, the UK's leading independent insolvency firm, reveals that nearly half a million businesses across the country ended 2017 in a state of 'Significant' financial distress, as potentially 2018 looks set to be another challenging year for the UK economy. \n \nAccording to Begbies Traynor's Red Flag Alert research for Q4 2017, which monitors the financial health of UK companies, 493,296 businesses were experiencing 'Significant' financial distress at the end of the 2017, up 36% compared to the same period last year (Q4 2016: 361,856) and 10% higher than the previous quarter (Q3 2017: 448,011).\n \nBegbies Traynor warns that a number of macro-economic pressures last year contributed to this considerable increase in distress, with the combination of rising inflation, stagnant real wage growth, a weak Pound, political uncertainty, November's rise in interest rates, and the ever-tightening credit environment putting increasing financial stress on businesses across the country. As a result, 258,349 UK businesses ended the year in a position of negative net worth1, while a further 154,251 demonstrated a worrying increase in their working capital deficit.\n \nThe data shows that 'Significant' distress rose across every sector and region of the UK over the past 12 months. Support Services was the worst performing sector by volume, with 121,095 businesses showing signs of financial difficulty at the end of 2017, up 43% on last year. Over the same period, financial distress in the UK Construction industry grew 31% impacting 62,294 firms, while 'Significant' financial distress in the Real Estate sector increased by 46%, hitting 40,508 companies. These three sectors alone made up 45% of all UK businesses in 'Significant' financial distress.\n \nHowever, there was more positive news for businesses with a strong export book who benefitted from the devaluation of the Pound, particul...