Scottish corporate insolvency incidents on the rise

SCOTTISH corporate insolvencies in the latest quarter were up on the same period of last year, the latest statistics show, and the Brexit vote is forecast to have a detrimental impact in terms of future company failure levels.

The figures, published by accountancy firm KPMG, show there were 269 corporate insolvencies in the three months to June, up by three per cent on the second quarter of 2015. This year-on-year comparison strips out the effect of seasonal fluctuations.

The number of corporate insolvencies in the quarter to June, comprising 245 liquidation and 24 administration appointments, was up by 30 per cent on the opening three months of this year.

KPMG cited the impact of the oil and gas downturn.

The number of liquidation appointments in the three months to June was up by four per cent on the same period of last year. The number of administration appointments, which tend to relate to larger businesses, dipped to 24 in the quarter to June from 27 in the same period of 2015.

Blair Nimmo, head of restructuring for KPMG in the UK, said: “The latest insolvency statistics reflect the position immediately prior to the EU referendum when, generally, businesses were adopting a wait and see approach in a relatively stable environment.

“We would however note that... the oil and gas downturn is beginning to feed through in the figures, despite the recent improvement in oil price.”

He added: “The impact of Brexit remains to be seen, albeit the uncertainty and disruption which has resulted is likely to have a negative impact on future insolvency levels. At this stage, it is impossible to predict when and to what extent that will happen, although clearly some sectors are more exposed than others.”