Trouble ahead for struggling firms

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FIRMS in Portsmouth will find that 2012 will be no kinder than last year, according to liquidation specialist Begbies Traynor.

The company, which has an office at 1000 Lakeside in North Harbour, has released its latest Red Flag Alert, the UK’s leading quarterly benchmark of financial distress.

Julie Palmer, partner at the Portsmouth office, said there are likely to be increases in the numbers of businesses falling into distress during the coming quarters of 2012.

Her prediction came as it was revealed that Portsmouth had more firms in distress in the final quarter (Q4) of last year than in the three months before that.

Portsmouth had 304 firms with significant problems in the fourth quarter, against 218 in the June to September period, up 39 per cent. However, the number of companies with critical problems dropped from eight to seven.

Ms Palmer said: ‘The broad spread of distress reaches across just about every sector, but there are hot spots such as the travel and tourism and professional services sectors.

‘The travel and tourism industry was hit hard in 2011 and there appears no respite in sight.

‘The first quarter of the year, typically the travel and tourism sector’s main booking season, is a vital period when companies can take in much-needed deposits and this quarter is going to be particularly critical for many of them.

‘With household disposable income under so much pressure, and job security at an all-time low we believe that booking volumes will fall and this in turn will result in some travel and tourism household names failures during the next quarter.’