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The Insolvency Service has released statistics for the fourth quarter of 2014 and for 2014 as a whole for all of the insolvencies in England and Wales.  In case you do not want to trawl through the 30 page report (although the pictures are quite pretty). Here is a handy infographic with the headlines.  The good news is that overall, insolvencies have fallen across the board in 2014 (although compulsory liquidations were slightly up).

Zombie companies

This is good news for businesses but I think the news hides a number of underlying issues.  Firstly, the decline in insolvencies is not evidence that the phenomenon of zombie companies has been dealt with.  Instead, it would appear that zombies were simply supported by their creditors for another year.  Although the issue of zombie companies has left the media spotlight recently, these are still an issue in terms of the levels of debt they carry; asset values and liquidity in the market for ‘recycled’ assets.

Insolvency by sector

The statistics released by the Insolvency Service include a set of experimental statistics that break down the total number of company liquidations in England and Wales by broad industry sectors, for the year ending 2014 Q3.  This shows that construction, wholesale trade, retail trade and repair of vehicles held the top spots for number of compulsory liquidations and creditors voluntary liquidations.  Construction clearly continues to have a hard time of it notwithstanding recent good news on investment and profits from the home builders.

The other industry sectors most affected by liquidations were administrative and support services and accommodation and food services.  Manufacturing took fifth spot for the number of creditors voluntary liquidations and other service activities took fifth spot for compulsory liquidations.  These have been the same top industry sectors for compulsory and voluntary liquidations since these statistics were first gathered in 2009; indicating that the recession has clearly hit these sectors the hardest and that this is unlikely to change throughout 2015.

Individual and business finances

Individuals and businesses tend to begin the New Year with a positive outlook, with bold plans and resolutions to make this year better than the last.  For anyone involved in the above industry sectors, this should include a review of their finances to ensure that they can battle and win in 2015, instead of becoming another statistic.

Insolvency advice

Bray & Bray have three main offices across Leicestershire. Feel free to phone or pop in to talk to our solicitors.