Signs of distress on rise in Scottish firms

The number of Scottish firms seeing instances of “signifi‑ cant” business distress is ris‑ ing rapidly, according to new figures.

The Red Flag Alert data yes‑ terdday from business res‑ cue firm Begbies Traynor showed a jump of 11 per cent in the last three months of 2016 compared to the previ‑ ous quarter and a three per cent year‑on‑year rise.

Instances of “critical” dis‑ tress levels, which include winding‑up petitions, rose by 2 per cent quarter on quarter, but fell by 56 per cent com‑ pared with a year ago.

The sharp annual fall was attributed largely to a recov‑ ery in the construction, real estate and hospitality sectors that have fared well compared to the same period in 2015.

But the figures also show that the logistics, manufacturing, media and travel sectors are all facing double digit rises year‑on‑year.

Ken Pattullo, who leads Beg‑ bies Traynor in Scotland, said: “The fall in critical instances is overshadowed by the over‑ all rise in more common sig‑ nificant distress levels, and the gap between the fortunes of some sectors is stark.”

In total, firms in Scotland showed 14,380 instances of significant business distress in the fourth quarter of 2016, with 93 per cent being report‑ ed from SMES and 7 per cent from larger firms.

Aberdeenshire business‑ es were particularly hard hit, showing 998 instances of sig‑ nificant distress, up by 10 per cent year on year.

“The impact of the oil and gas industry downturn continues to filter gradually through the whole economy,” said Pattullo. 0 Ken Pattullo: Latest data shows mixed picture