Distress rates ‘level off’ for Lancashire firms but dangers lurk ahead for almost 10,000 companies

By Begbies Traynor

05 Aug 2022

chris-lawton-of-begbies-traynor-in-preston-min.jpeg

Negligible increase in significant distress from Q1 to Q2 Just 97 more firms enter significant distress during period Begbies Traynor says almost 10,000 firms remain in danger and warns of challenges ahead during second half 2022

New data published today by Preston-based Begbies Traynor (5th August 2022) indicates a short-term levelling off in distress rates for firms across Lancashire as company directors fight hard against the impact of spiralling inflation.

However, experts at Begbies Traynor say that despite the small increase in the number of firms entering significant financial distress during the past quarter (97), almost 10,000 businesses are on the brink. 

The Red Flag Alert data, published by Begbies Traynor, has analysed the health of companies across the region for the last 15 years. 

Today, it confirms that 9,926 firms in Lancashire remain in ‘significant distress’. This is a 12% drop on the same period last year (11,254) which followed a national lockdown.

However the number of businesses in Lancashire falling into ‘critical distress’ has more than doubled with a 104% increase during the past 12 months (from 25 firms to 51).

Biggest falls in levels of significant distress amongst Lancashire-based  firms over the past 12 months have been in the Health & Education sector (24% reduction), Manufacturing (19%) and Automotive (18%) as demand in these sectors picks up in the post-pandemic era.

Real Estate & Property (1,303), Construction (1,431) and Support Services (1,320) were the three sectors that contained the highest volumes of distressed firms from the 22 analysed in Q2 of 2022.

Nationally, more than half a million firms are now in significant financial distress (582,452).

Chris Lawton, insolvency director at Begbies Traynor in Preston, said: “It will be a relief for many businesses to see a levelling off in distress rates in the past quarter but it remains to be seen whether this trend continues and company directors across Lancashire should remain cautious. 

“Many businesses have been agile in their response to rising inflation and hopefully will have planned for costs of raw materials in particular to continue rising during the remainder of this year.

“Ambiguity over which tax policies will be enacted in the UK looks set to continue until September when the new Prime Minister will be confirmed but we’ll already be most of the way through the third quarter by that point.

“As well as uncertainty over domestic politics, there’s the international aspect to consider including the situation in Ukraine and the increasing cost of energy as we progress into Autumn and Winter.” 

“Smart directors have used the opportunity since the start of the year to look at their banking facilities and debt arrangements and have been proactive in restructuring their debts and operations.

“Labour shortages and supply chain issues may also have an impact on the bottom line for a lot of companies and the working capital and cash availability will need to be monitored closely.  

“Given these circumstances, it would be wise for company directors to stay alert during the remainder of the year and act quickly and decisively in the event of a sudden cashflow squeeze or demands from creditors.”

Latest news

1

fulfilmentcrowd reports record-breaking performance LeeThompsonfulfilmentcrowd

fulfilmentcrowd reports record-breaking performance

20 Dec 2024

2

Record year for Grant Thornton Northern deals team The team

Record year for Grant Thornton Northern deals team

20 Dec 2024

3

New partner among family team hires as Brabners strengthens personal offer Cara Nuttall Chris Fairhurst And Hannah Saxe

New partner among family team hires as Brabners strengthens personal offer

20 Dec 2024

4

Amazing Accrington bring in almost £400k in funding to Hyndburn Clayton Boxing Club press.jpg.jpg

Amazing Accrington bring in almost £400k in funding to Hyndburn

19 Dec 2024

5

BAE Systems solar powered aircraft achieves new stratospheric success The flight

BAE Systems solar powered aircraft achieves new stratospheric success

19 Dec 2024

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
The Lancashire Festival of Business
FOB 315
Exhibitions
30 Jan 2025

The Lancashire Festival of Business

Impact Conferencing, Burnley, BB12 6QP

09:30 - 16:00

Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

Preston Tech Connection - January Meet-Up
Nov Preston Tech Connection event banner-4.png.png
LBV Hub Networking
15 Jan 2025 - 15 Jan 2025

Preston Tech Connection - January Meet-Up

Society1 Coworking Space, Preston, PR1 3LT

18:00 - 19:30

R.I.S.E. and Shine
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
16 Jan 2025 - 16 Jan 2025

R.I.S.E. and Shine

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

08:45 - 11:00

The Business Network Central & East Lancashire
LBV Hub Networking
16 Jan 2025 - 16 Jan 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

LBV120 Magazine Launch Event
DSC9389
Networking
17 Jan 2025

LBV120 Magazine Launch Event

Lancastrian Suite, Town Hall, Chorley, PR7 1DP

08:30 - 10:30

Red Rose Awards 2025
Red Rose Awards 2025
Awards
13 Mar 2025

Red Rose Awards 2025

Winter Gardens Blackpool

18:00 - 11:59

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV118 Online Graphic
Subscribe now

Weekly news bulletin