February UK business insolvencies down

Financial strength continues to improve

Nottingham, 7 April 2011 - The latest Insolvency Index from Experian®, the global information services company, has revealed a year-on-year improvement in business insolvencies during February.

The total number of insolvencies fell by 12.5 per cent during February compared to the same month last year - from 1,834 in February 2010 to 1,605 in February 2011 – bringing the rate of insolvencies2 down from 0.10 per cent to 0.08 per cent.

The overall financial strength score [1] of UK businesses continued to improve, from 81.18 in February 2010 to 81.60 in February this year.  The score also saw a small month-on-month improvement from 81.49 in January.

Max Firth, Managing Director of pH, an Experian company, said: “The period of stability for businesses in the UK continues to head in a positive direction overall.  However, whilst smaller and larger companies are improving, insolvency rates for the midsized companies (20-100) continue at the same rate month on month. This could mean that in more challenging times they fall victim to being too large to be flexible and too small to rely on a solid, established business structure and long term contracts.

“The continued demise of the food retailing sector is also significant, with the declining financial strength of the industry an indication that smaller independent grocery traders are suffering.  Businesses can use insight such as insolvency rates and financial strength as a guide to which sectors and size of businesses may need enhanced risk management so signs of distress aren’t missed.”

Other key highlights include: 

·         Scotland saw the greatest improvement with the lowest insolvency rate at 0.06 per cent in February

·         Wales saw the biggest increase to the rate of insolvencies rising to 0.11 per cent from 0.08 per cent in February 2010.

·         Yorkshire was the worst performing region with a rate of 0.13 per cent.

·         Greater London continued to be the region where businesses had the lowest financial strength score at 80.51.

·         The smallest (1-2 employees) and largest (501+) companies, had the lowest rate of insolvencies with 0.06 per cent and 0.09 per cent respectively. 

·         Companies with 51-100 employees had the lowest financial strength score in February 2011 at 81.59.

·         The financial strength of businesses in the Leisure and Hotels rose from 79.09 in February 2009 to 80.05 – the biggest improvement compared to other sectors.

·         Food retailers continue to have the lowest score with the financial strength of the industry dropping massively in the last three years from 81.21 in February 2008 to 75.85 that was recorded in February 2011.



Region

Insolvencies Feb 11

Insolvencies  Feb 10

% of business population failing Feb 11

% of business population failing Feb 10

Financial Strength

Score Feb 11

Financial Strength

Score Feb 10

Scotland

 70

 107

0.06%

0.09%

 81.54

 81.09

North East

 42

 58

0.10%

0.15%

 81.77

 81.28

North West

 194

 245

0.10%

0.13%

 80.99

 80.63

Yorkshire

 155

 156

0.13%

0.13%

 81.50

 81.26

Wales

 60

 45

0.11%

0.08%

 81.19

 80.76

West Midlands

 143

 155

0.09%

0.10%

 80.79

 80.09

East Midlands

 117

 104

0.11%

0.10%

 81.89

 81.56

Eastern

 132

 144

0.07%

0.08%

 82.44

 82.20

South West

 114

 127

0.07%

0.08%

 83.21

 82.77

Greater London

 366

 452

0.08%

0.09%

 80.51

 79.99

South East

 212

 241

0.07%

0.08%

 82.72

 82.40

Grand Total

 1,605

 1,834

0.08%

0.10%

 81.60

 81.18

Source: pH, an Experian company


Number of employees

Insolvencies Feb 11

Insolvencies  Feb 10

% of business population failing Feb 11

% of business population failing Feb 10

Financial Strength

Score Feb 11

Financial Strength

Score Feb 10

1-2

 449

 565

0.05%

0.06%

 80.74

 80.40

3-5

 254

 252

0.06%

0.06%

 82.87

 82.48

6-10

 246

 298

0.11%

0.14%

 82.16

 82.09

11-25

 222

 278

0.17%

0.22%

 81.92

 81.46

26-50

 239

 231

0.23%

0.23%

 81.62

 81.02

51-100

 102

 109

0.21%

0.23%

 81.65

 80.57

101-500

 54

 48

0.20%

0.18%

 81.59

 80.13

501+

 31

 44

0.12%

0.17%

 82.81

 81.20

Unspecified

 8

 9

0.09%

0.10%

 85.07

 84.20

Grand Total

 1,605

 1,834

0.08%

0.10%

 81.60

 81.18

Source: pH, an Experian company


Sector

Insolvencies Feb 11

Insolvencies  Feb 10

% of business population failing Feb 11

% of business population failing Feb 10

Financial Strength

Score Feb 11

Financial Strength

Score Feb 10

Extractive Industries

 3

 2

0.21%

0.13%

 83.03

 82.76

Oil

 3

 4

0.11%

0.12%

 86.08

 86.31

Building and Construction

 279

 310

0.17%

0.19%

 78.10

 77.98

Building Materials

 7

 8

0.19%

0.21%

 80.38

 79.50

Chemicals Industry

 3

 3

0.11%

0.11%

 81.97

 81.34

Diversified Industrials

 42

 39

0.20%

0.18%

 78.36

 78.25

Electricals

 6

 8

0.07%

0.09%

 79.63

 79.38

Engineering

 44

 64

0.11%

0.17%

 79.76

 79.32

Printing, Paper and Packaging

 2

 5

0.06%

0.20%

 79.07

 78.25

Textiles and Clothing

 32

 29

0.22%

0.22%

 76.98

 76.80

Breweries

 -  

 -  

0.00%

0.00%

 79.47

 80.16

Spirits, Wine and Tobacco

 1

 -  

0.21%

0.00%

 82.85

 82.10

Food Manufacturing

 13

 8

0.20%

0.16%

 78.42

 77.90

Pharmaceuticals

 -  

 2

0.00%

0.22%

 82.21

 81.35

Wholesaling

 81

 71

0.13%

0.11%

 80.25

 79.85

Leisure and Hotels

 119

 139

0.14%

0.17%

 80.05

 79.09

Media

 44

 65

0.07%

0.10%

 81.04

 80.87

Food Retailing

 18

 15

0.11%

0.11%

 75.85

 76.78

Non-Food Retailing

 109

 121

0.13%

0.14%

 79.21

 79.07

Servicing/Repair

 3

 11

0.04%

0.13%

 82.91

 82.27

Transport

 54

 65

0.10%

0.13%

 79.06

 78.46

Utilities

 1

 2

0.04%

0.10%

 79.87

 80.34

Postal and Telecommunications

 13

 11

0.16%

0.13%

 76.97

 76.37

Agriculture, Forestry and Fishing

 11

 7

0.05%

0.03%

 85.47

 85.41

Banking and Financial Services

 45

 58

0.09%

0.12%

 84.27

 84.63

Health and Household

 -  

 1

0.00%

0.11%

 78.95

 79.51

Business Services

 352

 399

0.07%

0.08%

 82.17

 81.64

Hiring and Leasing

 22

 28

0.16%

0.21%

 82.16

 81.26

Property

 99

 95

0.07%

0.05%

 82.58

 83.48

Other Services

 84

 98

0.04%

0.05%

 86.30

 85.66

Plastics & Rubber

 9

 13

0.14%

0.23%

 78.44

 78.06

Insurance

 1

 12

0.01%

0.10%

 84.28

 84.76

IT

 39

 76

0.04%

0.07%

 83.97

 83.60

Motor Traders

 41

 30

0.12%

0.09%

 80.57

 79.95

Unspecified

 25

 35

0.02%

0.03%

 76.57

 74.17

Grand total

 1,605

 1,834

0.08%

0.10%

 81.60

 81.18

Source: pH, an Experian company


ENDS

Contact:

Natalie Hale 

0115 992 2645/07971 709274

natalie.hale@uk.experian.com

About Experian

Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil. 

For more information, visit
http://www.experianplc.com .

 

[1] The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.

2 The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.



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