THE outlook is bleak for businesses in the Portsmouth area, according to a city-based corporate recovery specialist.
Julie Palmer, partner in Begbies Traynor’s North Harbour office, said figures for the second quarter of the year show a slight rise in the number of firms reporting critical problems – meaning the administrators are called in.
There have been 13 companies in dire straits in the second quarter (Q2), compared to 12 in the first (Q1).
And some good news comes by looking at the companies reporting significant troubles – 191 in the second quarter of the year, compared to 344 in the first.
But Ms Palmer said: ‘It looks as if Portsmouth businesses are in for a rough ride this autumn.’
She said that although some companies have made use of HMRC’s time to pay scheme, which helps them spread their payments over an affordable time, it is still not enough to help them back to full health.
And she added that the government’s belt-tightening was also having an effect.
‘The austerity measures mean the government is finding it difficult to give second chances or extend its support to business owners that have chosen to use their money for another purpose and as a result, the number of winding-up petitions issued by HMRC in Q2 2011 has more than doubled since Q1.’
Nationally, Begbies Traynor’s Red Flag Alert, which monitors a series of indicators of company distress, showed a 12 per cent increase to 5,179 companies which experienced critical financial distress in the second quarter of 2011, compared to 4,620 companies in the first.
The south east region had 27,754 significant problems in the second quarter against 26,485 in the same period a year ago, which is an increase of 4.8 per cent.
The equivalent for critical problems was 1,401, compared to 1,145, up 22.4 per cent.
This compared to 47,349 significant problems and 1,122 critical in the first quarter of this year.