‘Another body blow’: Distress figures are on the rise, warns insolvency expertJan 26, 2021
MORE than 3,000 businesses in Milton Keynes were in “significant” financial distress during the last three months of 2020, according to new figure from a leading independent insolvency firm.
Begbies Traynor says the figure of 3,123 represents a 16% increase on the previous quarter and a 29% rise on the figure for October-December 2019.
Nationally, the latest Red Flag Alert research for Q4 2020 has recorded 630,000 businesses in ‘significant distress’, an annual increase of 27% and the largest numerical quarterly increase in financially distressed companies since Q2 2017.
In Milton Keynes, the professional services and manufacturing sectors are hardest hit, with increases of 26% and 32% respectively.
Marco Piacquadio, partner at Begbies Traynor in Milton Keynes, said the figures reflected the financial stresses that have been building over the past year.
“Many businesses have been dealt another body blow by the latest lockdown,” he added. “2020 was a devastating year for thousands of businesses as they fell deeper into financial distress and Q1 2021 seems to be offering little hope of an upturn in the market.”
The government’s extended furlough and financial support measures will provide some relief and will save a significant number of businesses from entering into insolvency in the short term, Mr Piacquadio said.
“However, this simply will not be enough to save every business. Although the UK’s announcement of a trade deal with the EU and the roll-out of Covid-19 vaccines offer some light at the end of a very dark tunnel, it is likely to be some time before we see any sort of recovery.”