Drop in number of corporate insolvencies

THERE WERE 218 corporate insolvencies in Scotland in the second quarter of the current financial year, down from 258 in the last quarter.

The number is 21 per cent higher than the corresponding quarter last year but down 15.5 per cent on the previous quarter, although with the relatively low number of corporate insolvencies overall, percentages can vary substantially between recording periods.

The figures were released by Accountant in Bankruptcy (AIB), which noted that the quarterly total had been declining until the second quarter of 2015-16 at which point numbers began to rise again, to levels last seen in 2013/14.

The quarterly figure consists of 154 compulsory liquidations, 61 creditors’ voluntary liquidations and three receiverships. There were also 106 members’ voluntary liquidations, which is down by half from the 215 recorded in the previous quarter.

Eileen Blackburn, chairwoman of R3 in Scotland’s technical committee, the insolvency trade body, said it was still too soon to tell if there will be a Brexit effect, but added that “it’s good to see that the initial turbulence hasn’t translated into businesses being pushed over the edge”.

She added: “However, the decision to leave the EU and a potential second Scottish independence referendum on the horizon means that businesses could face a period of prolonged uncertainty.”

Restructuring in oil and gas has helped keep insolvency numbers low, she said.