The Insolvency Service’s latest statistics for April to June reveal the number of companies entering a formal insolvency procedure fell 2.9% since the last quarter and 7.5% since Q2 2014, resulting in the lowest number of company insolvencies since 2007.
The number of companies in compulsory liquidation fell by 15.4% since the first quarter and 21.9% since the same time last year. This was the biggest drop compared to other insolvencies and contributed most to the overall decline.
There were fewer company voluntary arrangements between April and June, down 2.2% since the first quarter to 91. Compared to last year, the number has dropped by a staggering 35.9%, making it the lowest number since 2007.
There were also a few increases since the last quarter.
The number of companies entering creditors voluntary liquidation rose by 0.5% since Q1 (with just a slight fall of 2.3% since the same period in 2014).
The Companies House data also shows an increase in administrations and receiverships. While the number of administrations fell by 1.2% since the beginning of 2015, there has actually been an increase of 4.8% since the same time last year. Q2 shows a total of 423 administrations.
Receiverships (which include LPA property receiverships) have risen by 12% since the first quarter but have fallen 7% year on year. This indicates a current increase of companies and individuals taking out loans against property and failing to pay them back, resulting in more appointments.
Source: Insolvency Service – gov.uk
Aside from compulsory liquidations, the statistics indicate the number of companies in formal insolvencies is starting to fall at a slower pace, compared to a year ago where falls were quite significant. Figures are flattening but are still in a gradual decline most likely due to the improving economy, low interest rates and an easing of pressure from creditors.
With a slight increase of administrations since 2014, we may see a further rise throughout 2015. The number of compulsory winding up petitions also looks set to fall significantly over the next year as more companies focus on informal turnarounds and prevent their businesses from being wound up by the courts.