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April 2024 Company Insolvency Statistics

Insolvency Statistics April 2024

Insights and Implications for UK Businesses

The latest company insolvency statistics for England and Wales, released for April 2024, reveal significant increases in insolvencies across various sectors. Business Helpline offers a detailed analysis of these figures and their potential impact on UK businesses.

Key Insights from April 2024

1.Surge in Company Insolvencies:

  • Total Insolvencies: In April 2024, the number of registered company insolvencies in England and Wales was 2,177, an 18% increase from both March 2024 and April 2023.
  • Types of Insolvencies: The total comprised 300 compulsory liquidations, 1,715 creditors’ voluntary liquidations (CVLs), 144 administrations, and 18 company voluntary arrangements (CVAs).

2. Increased Insolvency Rate

  • Insolvency Rate: One in 175 companies on the Companies House effective register entered insolvency between May 2023 and April 2024, corresponding to a rate of 57.0 per 10,000 companies. This is up from 52.6 per 10,000 in the previous year.

3. Comparison to Historical Data

  • Despite the rise, the current insolvency rate remains significantly lower than the peak of 113.1 per 10,000 companies during the 2008-09 recession, primarily due to the doubling of the number of companies on the effective register over this period.

4. Breakdown by Insolvency Type

  • CVLs: Accounted for 79% of all company insolvencies in April 2024, showing an 18% increase from both March 2024 and April 2023.
  • Compulsory Liquidations: Rose by 11% from March 2024 and 21% from April 2023.
  • Administrations: Increased by 36% from March 2024 and 25% from April 2023.
  • CVAs: Doubled from March 2024 and were 50% higher than in April 2023, although still low compared to historical levels.
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Detailed Analysis

1. Company Voluntary Liquidations (CVLs)

  • CVLs: Accounted for 79% of all company insolvencies in April 2024, showing an 18% increase from both March 2024 and April 2023.
  • Compulsory Liquidations: Rose by 11% from March 2024 and 21% from April 2023.
  • Administrations: Increased by 36% from March 2024 and 25% from April 2023.
  • CVAs: Doubled from March 2024 and were 50% higher than in April 2023, although still low compared to historical levels.

2. Compulsory Liquidations

  • The increase in compulsory liquidations indicates that more businesses are unable to pay their debts, leading to court-ordered wind-ups. This trend highlights ongoing financial pressures and possibly stricter enforcement by creditors.

3. Administrations

  • The significant rise in administrations suggests that more businesses are seeking formal insolvency procedures to restructure and attempt to continue trading.

4. Company Voluntary Arrangements (CVAs)

  • Despite their increase, CVAs remain less common, reflecting the challenges businesses face in negotiating agreements with creditors to pay off debts over time.

Industry-Specific Insights

  • Construction: Experienced the highest number of insolvencies, reflecting ongoing challenges in this sector.
  • Wholesale and Retail Trade: Also saw high insolvency rates, indicating continued struggles with economic conditions and changing consumer behaviours.
  • Accommodation and Food Service: Notably, this sector saw a significant increase in insolvencies, underlining the impact of post-pandemic recovery challenges.
  • Administrative and Support Services: High insolvency rates in this sector may reflect broader economic pressures.
  • Professional, Scientific, and Technical Activities: Also faced significant insolvencies, indicating sector-specific financial difficulties.
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Commentary by Business Helpline

The significant increase in company insolvencies in April 2024 is a concerning trend for UK businesses. This rise across all types of insolvency indicates broader economic challenges and highlights the importance of proactive financial management and strategic planning for businesses.

Implications for Businesses

  • Financial Vigilance: Businesses must closely monitor their financial health and be vigilant in managing cash flow and liabilities.
  • Credit Management: Strengthening credit management processes can help mitigate risks associated with increased insolvencies.
  • Restructuring Opportunities: Exploring restructuring options early can provide pathways to recovery and continuation for struggling businesses.
  • Sector-Specific Strategies: Tailored strategies addressing sector-specific challenges, particularly in construction, retail, and hospitality, can enhance resilience.

Conclusion

The April 2024 insolvency statistics underscore the need for businesses to be adaptive and resilient in the face of economic pressures. By understanding these trends and implementing robust financial strategies, businesses can better navigate the challenges ahead. Business Helpline remains dedicated to supporting companies with expert advice and tailored solutions to help them thrive even in difficult times.

For more detailed information and statistical tables, please refer to the full Insolvency Statistics.

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    Andy Slinger

    Andy is Head of Marketing for Business Helpline with a wealth of experience Marketing in the financial sector. He has a passion for helping business owners struggling with debts.

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