A leading restructuring advisor is urging business owners to take advantage of going concern solutions while they still can, after compulsory liquidations doubled in 12 months to April 2023.
Colin Haig, head of restructuring with UK top ten accountancy firm Azets, which has offices at London Bridge, believes the high level of liquidations should have alarm bells ringing despite the total number of company insolvencies dipping last month.
The warning comes as latest monthly statistics for April 2023 reveal there were 1,685 company insolvencies, 15% lower than in the same month in the previous year (1,988 in April 2022) in England and Wales.
However, there were 183 compulsory liquidations in April 2023, nearly twice the number in April 2022.
Colin Haig said, “The long-term trend in business failures will continue to tick upwards despite the total number of insolvencies dipping last month.
“More concerning is the number of compulsory liquidations, which continues at double the rate of last year and is also likely to keep rising.
“Liquidation is an end-of-life process. It’s still possible to achieve going concern solutions for quite distressed business – but that won’t last.
“Too many business owners are failing to take advantage of more constructive options.
“Air cover via a moratorium or restructuring plan remain viable options.
“My advice to businesses is to face up to problems before an insolvent liquidation becomes the only option, and while capital is still available.
“An uptick in administrations is a much better sign of the UK’s economic resilience than an uptick in compulsory liquidations.
“Only the latter results in a total demise and loss of all jobs.”