The latest insolvency statistics show the number of companies in England and Wales that entered administration in 2014 fell 24.3% compared to the year before - the lowest annual record since 2004. The total number of liquidations (including compulsory and voluntary) fell 6.3% compared to 2013. This is the lowest it’s been since 2007.
The Insolvency Service has published their latest findings on company insolvencies in England and Wales over 2014 as well as the period between October and December last year (Q4).
Looking at the numbers, there were 14,040 liquidations in 2014 (made up of 3,738 compulsory liquidations and 10,302 creditors voluntary liquidations). The number of receiverships totalled 724, down 21% from 2013, while the number of company voluntary arrangements (CVAs) stood at 563 – a fall of just 2.4%. The year 2014 also marks the lowest record for the number of companies in receiverships and CVAs since 2007.
See the graph from The Insolvency Service below:
Interestingly, figures from the last three months of 2014 reveal the number of companies in creditors voluntary liquidation (CVL) actually increased by 4.4% since Q3 (July – September). However, compared with the same period in 2013, the number fell by 7.6%. This in part is explained by the quieter summer months that can lead to less aggressive creditor actions, especially HMRC.
The number of companies in administration, receiverships and CVAs all dropped between Q4 and Q3 with the number of administrations falling the most (18.2%). Compared to Q4 2013, the number fell by 35.9% (not to be confused with comparisons of annual figures above).
These statistics overall are not particularly surprising as the economy has started to grow quite significantly since 2013 when double dip recession was still being talked about. In addition, new forms of finance have helped smaller businesses have access to working capital, which would have otherwise needed to be sourced from the reluctant banks. However, in our experience, some directors have used additional personal finance and guarantees to prop up near insolvent businesses. It will be interesting to see if these additional monies will solve their problems or simply delay them.