Number of businesses failing drops in Q2

The number of firms failing in Scotland saw a significant drop in the second quarter, according to new data from accountant KPMG.

The total number of insolvency appointments fell by 27 per cent from the same period last year to reach 196.

Liquidations, which tend to affect smaller businesses, fell by nearly a third to 170, but administration appointments that generally involve larger firms increased to 26 from 24.

Blair Nimmo, head of restructuring for KPMG in the UK, said the data mirrors the firm’s “experience on the ground”.

He said the oil and gas sector has come through troubled times, with many businesses emerging stronger after overhauling their operating models and slashing costs.

“As a result, we are seeing few insolvencies in this sector … Otherwise, it is difficult to detect any sectoral pattern in Scotland and, overall, we sense a very cautious approach from most corporates, given the current political and economic climate.”

He also forecast further storm clouds such as Brexit’s impact, and said: “The next 12 months and beyond will be challenging for many businesses and it will be interesting to see how Scotland fares relative to the rest of the UK.”

Separate data from insolvency and restructuring trade body R3 found that firms in Scotland have the lowest levels of insolvency risk of anywhere in the UK.

It reported that in July, 21.8 per cent of Scottish companies were at higher-than-normal risk of insolvency, against a UK average of 27.3 per cent. 0 KPMG’S Blair Nimmo anticipates hurdles ahead