Businesses on course to recovery

MORE than 100 Townsville businesses have been identified as being at risk of imminent collapse.

New data by specialist accounting firm SV Partners reveals 108 Townsville businesses, or 3.1 per cent, are at high risk of financial failure, a big increase on the 1.8 per cent listed as at risk six months ago.

However, there is confidence that Townsville’s economy has turned the corner and the outlook for business is brighter.

The most at- risk industries in the region are accommodation and food services, and mining, with the percentages of each listed as high risk being 7.8 and 7.4 per cent respectively.

The findings have been published in SV Partners August 2017 Commercial Risk Outlook Report.

The report draws upon millions of commercially sourced records and data assets to create and analyse comprehensive risk profiles of more than half a million Australian incorporated businesses.

SV Partners executive director David Stimpson said the report classified business and industry in 10 categories.

“The top three are going well, making money and at no real risk of failure,” he said.

“The bands from three to six are going OK but showing signs of speed bumps. Then you have the at- risk band of one to four and they’re classified as potentially hitting the wall over the next 12 months.”

Mr Stimpson said the information was drawn from publicly available data.

“It comes from credit reference bureaus, the courts and other avenues,” he said.

“We also look at defaults on credit ratings and legal action against business owners or directors.

“There are also reporting bureaus that keep details on how quickly businesses are repaying their debts.”

Mr Stimpson said the mining industry in Townsville was still feeling a flow- on effect from a recent downturn.

“We know the mining sector is showing signs of recovery but that’s not going to help those businesses that have been affected from two or three years ago,” he said.

Mr Stimpson said the data should be not a cause of major concern.

“I think the Townsville economy is on the way up, especially for business,” he said.

“The increase is a lag from the depressed economy that we’ve had.

“In my opinion there is a recovery.

“For some, the recovery has been too slow or hasn’t come soon enough.”

It is not all bad news for the Townsville region though as the agriculture, forestry and fishing and information media and telecommunications industries have been shown to have very low percentages of high- risk businesses.

Neither of these sectors had any businesses listed as being at high risk of collapse and 83.7 per cent of agriculture, forestry and fishing businesses were listed as being of low risk, along with 80 per cent of information media and telecommunications.