Pandemic’s legacy: 43% rise in companies facing ‘significant’ financial distressApr 26, 2021
MORE than 3,500 Milton Keynes businesses found themselves in “significant” financial distress during the first three months of 2021, according to the latest figures from independent insolvency firm Begbies Traynor.
Milton Keynes saw a 13% increase in the number of businesses struggling between Q4 2020 and Q1 2021 to 3,523 – up by 43% on the same period in 2020.
Nationally, the latest Red Flag Alert research for Q1 2021 has recorded 723,000 businesses in “significant distress”, a rise of 42% year on year. This represents the largest numerical quarterly increase – 15% – in financially distressed companies since the Red Flag Alert research launched in 2014. The figure equates to 93,000 ailing businesses.
In Milton Keynes, businesses in some sectors faced greater financial difficulty than others, including industrial and real estate and property, increasing 33% and 24% respectively between Q4 2020 and Q1 2021.
Julie Palmer, partner at Begbies Traynor in Milton Keynes, said: “This huge increase in financially distressed companies in Milton Keynes shows that the last 12 months have undoubtedly been some of the hardest that many businesses have encountered.
“We must remember that this is no ordinary recession and while some businesses have had significant assistance from central government, large parts of the economy have had to function with their doors closed to their main source of custom.
“With the reopening of the economy over the next few months, there is a lot of work for many businesses to do, but those that have the talent to thrive in normal circumstances will find a way to adapt.
“The pandemic has changed customer expectations and behaviours potentially permanently and those businesses that were profitable pre-Covid-19 and can demonstrate a strong recovery plan can survive.”