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Home » Blog » Huge Rise Reported In Businesses Suffering Acute Financial Distress

Huge Rise Reported In Businesses Suffering Acute Financial Distress

January 22, 2024 By //  by Des Ingham Leave a Comment

The latest report by independent business rescue and recovery specialist Begbies Traynor has revealed that there was a huge rise in businesses suffering acute financial distress in the last quarter of 2023. There were nearly 40% more businesses showing they had major financial worries in the last quarter when compared to the previous year, which is a very concerning figure indeed.

The Utilities Sector Was Particularly Badly Hit

Here are some of the figures from the report, as copied from an article on the Belfast Newsletter website. It says that:

‘Some sectors were particularly badly hit with utilities seeing a quarter-on-quarter rise in critical distress of 300%; food and drug retailers (+180%); transport and logistics (+129%); professional services (+108%); and leisure and cultural activities (+56%).

‘Only two sectors in Northern Ireland saw critical distress fall since the previous quarter – financial services fell by 25%; and wholesale by 12%.

‘The less advanced ‘significant’ distress (which refers to businesses showing deterioration in key financial ratios and indicators including those measuring working capital, contingent liabilities, retained profits and net worth) also saw a rise in Northern Ireland, increasing by 20.5% quarter-on-quarter; and by 7.1% compared with the same period in 2022.

‘More than 9,000 businesses in Northern Ireland suffered from significant distress in the final three months of 2023.’

Having Taken On Debt Many Businesses Are Now Paying The Price

In the same article, Lawrence O’Hara, who leads Begbies Traynor in Northern Ireland, said: “While the economic picture across the UK is far from rosy, it is extremely worrying to see Northern Ireland experiencing one of the sharpest increases in advanced critical distress since the previous quarter. Having taken on debt when interest rates were low, growing numbers of businesses are now paying the price.

“With the cost of living crisis impacting consumer spending and continuing high inflation, businesses within Northern Ireland are struggling to regain stability and, unfortunately, many of these businesses may now be on the road to insolvency. It is imperative that these businesses should seek professional advice as soon as they can, to avoid financial problems from escalating.”

And that is extremely good advice. Here at WHR Accountants we can certainly give you sound professional advice on how best to financially manage your business.The sooner you seek advice, before you get into real trouble, the better the outcome is likely to be, so please get in touch if you need us by giving our team a call on 028 3752 2909.

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