‘Fewer Scot­tish firms go­ing bust, but haz­ards lie ahead’

In­sol­vency: Oil and gas firms on shaky ground, warns KPMG

The Press and Journal (Moray) - - BUSINESS - BY MARK LAMMEY

The num­ber of com­pa­nies go­ing bust in Scot­land fell in the sec­ond quar­ter com­pared to the same pe­riod last year but was higher com­pared to the first three months of 2015, new fig­ures show.

But while pro­fes­sional ser­vices firm KPMG said the fig­ures were “pos­i­tive for the ma­jor­ity of busi­nesses”, it warned that the oil and gas in­dus­try was con­tin­u­ing to strug­gle.

The food and drink, con­struc­tion and care homes sec­tors also fare com­par­a­tively poorly, ac­cord­ing to the latest Scot­tish in­sol­vency fig­ures from KPMG.

Some 214 cor­po­rate in­sol­vency ap­point­ments took place dur­ing the sec­ond quar­ter of 2015, an 11% drop year-on-year, the firm found. How­ever, ad­min­is­tra­tions, which typ­i­cally af­fect larger or­gan­i­sa­tions, in­creased by 33% from April to June 2015.

KPMG said the sta­tis­tics show that most busi­nesses north of the bor­der are in a strong po­si­tion, de­spite the num­berof busi­ness fail­ings ris­ing 14% be­tween­the first and sec­ond quar­ters of 2015.

It said the over­all trend is still pos­i­tive as the num­ber of in­sol­vency ap­point- ments de­clined 16% in the first half of 2015 com­pared with the same pe­riod a year ear­lier.

Blair Nimmo, head of restruc­tur­ing for KPMG in Scot­land, said: “De­spite some un­cer­tain­ties, the over­all pic­ture re­mains pos­i­tive for the ma­jor­ity of busi­nesses in Scot­land, most of whom are on a fairly sta­ble foot­ing and look­ing to the fu­ture with con­fi­dence. This is re­flected by the over­all down­ward trend in the num­ber of cor­po­rate in­sol­vency ap­point­ments made in 2015.”

How­ever, while the UK chan­cel­lor has in­tro­duced mea­sures to help the oil and gas in­dus­try, in­clud­ing an in­crease in the An­nual In­vest­ment Al­lowance, the com­ing months will pro- vide a cru­cial test for energy com­pa­nies.

Mr Nimmo said: “The na­tional fig­ures mask on­go­ing chal­lenges fac­ing busi­nesses in cer­tain in­dus­tries. Oil and gas con­tin­ues to strug­gle – even as the price of oil be­gins to climb. The sum­mer Bud­get went some way to re­liev­ing the pres­sure on the in­dus­try but chal­lenges re­main and the next six to 12 months will be an in­di­ca­tor of the sec­tor’s re­silience.

“As well as those in oil and gas, our restruc­tur­ing ad­vi­sory and debt ad­vi­sory prac­tices are busy work­ing with busi­nesses across the food and drink, con­struc­tion and care home sec­tors, of which is­sues re­lat­ing to pen­sion deficits, work­ing cap­i­tal man­age­ment, cost re­duc­tion and re­fi­nanc­ing re­main a pri­or­ity.”

Mr Nimmo’s com­ments fol­low on­from a study­pub­lished ear­lier this week by in­sol­vency spe­cial­ist Beg­bies Traynor, which said the num­ber of food and drink mak­ers in Scot­land that were in dis­tress rose 29% com­pared with a year ago amid the on­go­ing su­per­mar­ket price war.

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