UK business insolvencies fall in January

Nottingham, 3 March 2011 — The latest Insolvency Index from Experian®, the global information services company, reveals a positive picture in January, with the number of business failures down by more than 10 per cent compared to January 2010.

1,266 businesses failed in January 2011, representing 0.07 per cent of the UK’s business community. This compares with 1,426 in January 2010.  The strength of the UK’s business community also improved year-on-year, with its overall financial strength score [1] improving from 81.16 in January 2010 to 81.49 this year.

Max Firth, Managing Director of Experian pH, said: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving. Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading up by one percent when compared with last January. Irrespective of the environment, firms need to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers. With issues from fulfilling increased orders through to late payment, the knowledge of how these will affect cash flow is imperative.”

Other key highlights include: 

  • Businesses in the South West continued to be the most robust, with the best financial strength score of 83.10 during January 2011.
  • Yorkshire saw the biggest drop in the rate of insolvencies, from 0.14 per cent in 2010 to 0.06 per cent in January this year.
  • Wales and the North West were the only two regions to see an increase in the rate of business insolvencies year-on-year.  The North West had the highest insolvency rate in January with 0.11 per cent of its business population failing, closely followed by the North East at 0.10 per cent.
  • In January 2011, medium sized businesses (26-50 employees) had the highest rate of insolvencies (0.17 per cent)
  • Businesses with 51 to 100 employees had the worst average financial strength score (81.48), although they did see a small year-on-year improvement (from 80.06).
  • Food retailers suffered the biggest decline in financial strength, dropping from 76.85 in January 2010 to 75.77 leaving it the industry with the lowest score in January 2011. 
  • The oil industry remains the top performing sector in terms of financial strength leading the way with 85.98.

 

Region

Insolvencies Jan 11

% change from Jan 10

% of business population failing Jan 11

% of business population failing Jan 10

Financial Strength

Score Jan 11

Financial Strength

Score Jan 10

Scotland

 69

-16.87

0.06%

0.07%

 81.38

 81.12

North East

 42

-14.29

0.11%

0.13%

 81.69

 81.24

North West

 182

33.82

0.10%

0.07%

 80.92

 80.45

Yorkshire

 73

-53.21

0.06%

0.14%

 81.45

 81.24

Wales

 50

56.25

0.09%

0.06%

 81.09

 80.74

West Midlands

 121

0.00

0.08%

0.08%

 80.69

 80.07

East Midlands

 75

-10.71

0.07%

0.08%

 81.80

 81.59

Eastern

 96

-16.52

0.05%

0.07%

 82.36

 82.20

South West

 91

-11.65

0.06%

0.07%

 83.10

 82.68

Greater London

 302

-9.04

0.06%

0.07%

 80.37

 80.02

South East

 165

-23.26

0.05%

0.07%

 82.63

 82.42

Grand Total

 1,266

-11.22

0.07%

0.08%

 81.49

 81.16

Source: Experian pH

 

Number of employees

Insolvencies Jan 11

% change from Jan 10

% of business population failing Jan 11

% of business population failing Jan 10

Financial Strength

Score Jan 11

Financial Strength

Score Jan 10

1-2

 221

24.16

0.04%

0.05%

 82.74

 82.43

3-5

 193

-13.84

0.10%

0.09%

 82.06

 82.03

6-10

 154

-27.01

0.16%

0.12%

 81.78

 81.39

11-25

 167

-13.02

0.19%

0.16%

 81.54

 80.97

26-50

 79

-12.22

0.19%

0.17%

 81.58

 80.54

51-100

 40

-23.08

0.19%

0.15%

 81.48

 80.06

101-500

 30

-30.23

0.16%

0.11%

 82.75

 81.15

501+

 6

-50.00

0.13%

0.07%

 85.09

 84.21

Unspecified

 376

-11.32

0.05%

0.04%

 80.65

 80.42

Grand Total

 1,266

-11.22

0.08%

0.07%

 81.49

 81.16

Source: Experian pH

 

Sector

Insolvencies Jan 11

% change from Jan 10

% of business population failing Jan 11

% of business population failing Jan 10

Financial Strength

Score Jan 11

Financial Strength

Score Jan 10

Extractive Industries

 1

 

0.07%

0.00%

 82.97

 82.79

Oil

 -  

-100.00

0.00%

0.06%

 85.98

 86.34

Building and Construction

 205

-5.96

0.13%

0.14%

 77.97

 78.02

Building Materials

 -  

-100.00

0.00%

0.24%

 80.23

 79.56

Chemicals Industry

 7

133.33

0.26%

0.11%

 81.90

 81.34

Diversified Industrials

 29

-36.96

0.14%

0.21%

 78.26

 78.15

Electricals

 9

-35.71

0.10%

0.16%

 79.56

 79.37

Engineering

 35

-43.55

0.09%

0.16%

 79.67

 79.31

Printing, Paper and Packaging

 5

0.00

0.16%

0.20%

 79.07

 78.22

Textiles and Clothing

 14

-41.67

0.10%

0.18%

 76.90

 76.79

Breweries

 1

-50.00

0.21%

0.42%

 79.58

 80.00

Spirits, Wine and Tobacco

 -  

-  

0.00%

0.00%

 82.72

 82.34

Food Manufacturing

 7

16.67

0.11%

0.12%

 78.32

 77.81

Pharmaceuticals

 2

100.00

0.16%

0.11%

 82.14

 81.37

Wholesaling

 59

-7.81

0.10%

0.10%

 80.13

 79.85

Leisure and Hotels

 101

9.78

0.12%

0.11%

 79.90

 79.02

Media

 30

-43.40

0.05%

0.08%

 80.96

 80.89

Food Retailing

 11

-35.29

0.07%

0.12%

 75.77

 76.85

Non-Food Retailing

 71

-22.83

0.09%

0.11%

 79.14

 79.07

Servicing/Repair

 8

60.00

0.11%

0.06%

 82.86

 82.29

Transport

 64

14.29

0.12%

0.11%

 78.94

 78.41

Utilities

 -  

-  

0.00%

0.00%

 79.79

 80.51

Postal and Telecommunications

 11

22.22

0.14%

0.11%

 76.74

 76.30

Agriculture, Forestry and Fishing

 6

-25.00

0.03%

0.04%

 85.41

 85.38

Banking and Financial Services

 40

-18.37

0.08%

0.10%

 84.16

 84.60

Health and Household

 1

-  

0.12%

0.00%

 78.88

 79.52

Business Services

 299

-11.01

0.06%

0.06%

 82.04

 81.61

Hiring and Leasing

 15

25.00

0.11%

0.09%

 82.05

 81.30

Property

 67

-1.47

0.05%

0.04%

 82.52

 83.47

Other Services

 72

16.13

0.03%

0.04%

 86.26

 85.67

Plastics & Rubber

 11

-26.67

0.17%

0.27%

 78.27

 78.00

Insurance

 5

66.67

0.04%

0.03%

 84.27

 84.72

IT

 37

-30.19

0.04%

0.05%

 83.89

 83.60

Motor Traders

 28

0.00

0.08%

0.08%

 80.48

 79.91

Unspecified

 15

25.00

0.01%

0.01%

 76.45

 74.04

Grand total

 1,266

-11.22

0.07%

0.08%

 81.49

 81.16

Source: Experian pH

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 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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