Warning for Hampshire businesses as figures show quarterly insolvency figures have reached a 13-year high

BUSINESSES are being warned of tougher times yet to come as the R3 trade body for Hampshire has released figures showing that quarterly insolvency figures have reached a 13-year high in England and Wales.
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Figures for the second quarter of 2022 (April-June) in England and Wales were almost double those for the first quarter of the year and their highest since Q3 2009.

R3’s analysis of the latest statistics from The Insolvency Service showed that there were 5,629 seasonally adjusted corporate insolvencies in Q2 2022, an increase of 12.7 per cent compared to Q1 2022's figure of 4,995 and of 81.3 per cent compared to Q2 2021 (3,105). It was the highest quarterly total since Q3 2009 (5,749).

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R3 chairman Garry Lee. Picture: Paul Collins/Deep South MediaR3 chairman Garry Lee. Picture: Paul Collins/Deep South Media
R3 chairman Garry Lee. Picture: Paul Collins/Deep South Media
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Garry Lee, chair of R3’s Southern and Thames Valley region, including Hampshire, said: ‘The latest quarterly corporate insolvency figures lay bare the major impact inflation and the legacy of the Covid pandemic is having on businesses.

‘They show the highest levels of corporate insolvency on a quarterly basis in more than 10 years and a significant increase on the first three months of 2022.

‘This has been driven by a rise in all forms of insolvency process – but Creditors’ Voluntary Liquidations have peaked to their highest recorded figure of 4,908, suggesting that many directors are opting to close their businesses as they lack confidence in their trading prospects in the current climate or feel that they are unable to continue in the face of increasing levels of debt.

‘The steady rise in Compulsory Liquidations we’ve seen since the start of the year also suggests that creditors are now making use of their power to issue winding-up petitions to try and claw back monies they are owed.’

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Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners, added: ‘The current economic headwinds are only likely to get worse before they get better.

‘Businesses in Hampshire could have a tough second half of the year.

‘For company directors and owners concerned about their prospects in the months ahead, now is the time to make sure they have a clear plan in place for the future.’

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