KPMG reports rise in UK companies collapsing into administration
Accountancy firm KPMG released a report on Monday claiming that the number of UK businesses that were collapsing into administration was on the rise.
The number of companies that fell into administration rose by 5% to 1,400 in 2019, said KPMG in its report, with construction and retail the worst hit sectors.
In turn, the restructuring of a large number of high street retailers has impacted commercial property income and values.
There was also an increase in insolvencies in the third quarter of last year with 420 firms going into administration.
That was followed by 311 administrations between October and December, including companies such as Clintons, Toto Energy and Bonmarché.
Blair Nimmo, the head of restructuring at KPMG UK, said: “2019 was a year characterised by profound political and economic uncertainty, with consumer confidence remaining fragile and companies continuing to bear the brunt of rising overheads and increased costs.
“While many battened down the financial hatches, adopting a prudent and cautious strategy, for some, the challenging trading conditions proved to be a bridge too far.”
He added: “It’s certainly no surprise that we have seen an increase in real estate insolvencies over the past 12 months, particularly when you consider two specific drivers of activity.
“Firstly, companies that specialise and support residential property development and investment were significantly affected by persistent geo-political and economic uncertainty.
“And of course, the demise and ongoing restructuring of a large number of high street retailers is having a profound impact on commercial property income and values.”