More than 600 businesses in Yorkshire and Humberside experienced insolvency-related activity in March 2022 – a rise of over 100% since the previous month.
The research from insolvency and restructuring trade body R3, which is based on an analysis of data provided by CreditSafe, shows that the region has seen a steady increase in insolvency-related activities since the start of the year. This type of activity, which includes liquidator and administrator appointments and creditors’ meetings, affected 150 businesses in Yorkshire and Humberside in January, rising to 291 in February (up 94%) before jumping to 601 the following month (up 107%).
Looking across the rest of the UK, all except two of the 12 regions surveyed saw a month on month rise in insolvency-related activity of more than 100% – this included the North West which experienced the highest increase with a 165% uplift, followed by the South East (up 163%). The regions which saw the lowest rise in insolvency-related activity were Northern Ireland with a 38% increase, and the North East with a 91% rise.
R3’s analysis of the CreditSafe data also showed significant issues persisting in the region around late payment of invoices, one of the key indicators of business distress. In February, 51,312 companies in Yorkshire and Humberside owed money having been unable to meet their payments on time, this fell only slightly in March to 50,923 companies. Last month, the region’s firms had a total of almost 743,000 invoices on their books that had gone past their payment deadline without being settled, with an average invoice value of around £10,500.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, comments: “Given the increasingly challenging economic picture with soaring fuel and energy costs as well as global turmoil due to the Ukraine crisis, I would urge any firms in the region which are experiencing the early signs of financial distress, such as finding it difficult to meet their bills on time, to seek professional advice about how their problems can be mitigated before they spiral out of control.
“After two years of Covid-disruption, many businesses here and across the UK are still reeling from the aftermath so it’s hardly surprising that these latest economic pressures are hitting them hard. Unfortunately, we expect to see further tough times ahead causing increasing distress in the region.”
Ms Temple continues: “Despite greater awareness in recent years of the domino effect of late payment of invoices with financial strain being placed on customers’ businesses, this is an ongoing issue that can cause a myriad of problems, from preventing companies from expanding and taking advantage of new opportunities, to ultimately leading to insolvency.
“For any businesses that are experiencing insolvency-related issues, it is vital that they seek qualified help as soon as possible – insolvency practitioners have a wide range of tools at their disposal that can help companies get back on track.”