The latest statistics from the Insolvency Service have been released depicting the corporate insolvency landscape from January to March 2015; and for business owners in England and Wales, the picture looks promising.

The report contains the latest data on company insolvencies. This includes all companies that are unable to pay their debts and enter either liquidation, administration, or another company rescue procedure as a result.

The key findings

The total number of company insolvencies in England and Wales has fallen to its lowest level since Q4 of 2007. Creditors’ voluntary liquidations have fallen to their lowest level since Q2 of 2008.

However, there has been an increase in the number of compulsory liquidations for the first time since Q4 of 2014. The number of administrations has also increased since the previous quarter, although the figure has fallen for the year.

Both receiverships and company voluntary arrangements (CVAs) have also fallen to their lowest levels since Q4 of 2007.

The headline statistics

In Q1 of 2015, a total of 4,052 companies entered into a formal insolvency, representing a 1.3 percent decrease on the figures for Q4 of 2014, and an 11.3 percent fall when compared to Q1 of 2014. This is a continuation of the ongoing decreasing trend of falling company insolvencies since the start of 2014.

There were 2,481 companies entering into a creditor’s voluntary liquidation in Q1 of 2015. That represents a 3.7 percent decrease on the previous quarter, and a 5.6 percent fall when compared to the same period last year.

Compulsory liquidations were one of only a few forms of formal insolvency procedure to increase. A total of 904 companies were subject to a compulsory winding-up order in Q1 of 2015. This represents a 9.3 percent rise on the previous quarter, but a 15.9 percent fall on the same period last year.

Administrations have also been on the rise. There were 432 administrations in Q1 of 2015, which represents a 9.2 percent increase on the figures for the previous quarter. However, the general trend is downwards, with 16.9 percent fewer administrations than the same period last year.

Company voluntary arrangements (CVAs) and receiverships have both fallen considerably, down to 93 and 142 respectively in Q1 of 2015. This is the lowest both of these types of company insolvency have been since the final quarter of 2007.

Finally, the liquidation rate of active companies has fallen to its lowest level since Q4 of 1984, the earliest period from which it is possible to calculate the rate. The liquidation rate for the 12 months to March 2015 was just 0.5 percent of active companies.

Company liquidations by industry

The following is a breakdown of company liquidations by industry. These statistics are presented with a lag of one quarter due to the fact that compulsory liquidation cases can take several weeks to complete following the date of the court order.

In the final quarter of 2014, the five industries with the greatest number of creditors’ voluntary liquidations and compulsory liquidations were as follows:

1. Construction – 2,317
2. Wholesale and retail – 1,903
3. Accommodation and food service – 1,394
4. Administrative and support services – 1,355
5. Manufacturing – 1,008

A healthy prognosis

The number of corporate insolvencies in Scotland is following the same downwards trend, with a total of 221 company insolvencies in Q1 of 2015, representing a 19 percent decrease on the same period last year. With the economy now healthier than it has been since 2007, the future looks promising for businesses across the UK, and long may it continue!

For advice on liquidating an insolvent company or want to rescue your business call 08000 746 757 to speak to an insolvency/turnaround specialist.

Written by: Mike Smith