Begbies Traynor produce a quarterly report on British companies with serious debt issues. By looking at companies with an insolvent balance sheet filed at Companies House (always well behind the event), or winding up petitions and or a County Court Judgment over £5,000, the Red Flag survey monitors the health of deteriorating companies.
Begbies latest release (see below) is worrying but consistent with the sharp rise in companies with time to pay deals with HMRC for PAYE and VAT.
I belive that there are over 100,000 UK companies with very serious insolvency issues, that are just surviving day to day. On top of that as many as 250,000 will be finding cashflow tough.
Extract from Begbies Red Flag Release on 27th April
The statistics for the first quarter of 2009 show all sectors to be suffering from substantial growth of both Significant and Critical adverse actions, in comparison to the same period a year ago.
With regard to industry sectors the Red Flag statistics indicate that Property Services, Construction and Financial Services have been hardest hit when compared to Q1 2008. Other major sector casualties include Retail, Advertising, Automotive, Transport & Communications, and Manufacturing.
The total number of companies showing signs of stress (both significant and critical problems) has risen to 84,648 in March 2009 compared to 53,240 a year ago, an increase of 59%.