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Company Insolvency Update – September 2024
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Insolvency figures for September 2024 reflect both monthly and yearly changes, alongside significant developments in the construction sector.
Total Company Insolvencies:
1,973 cases, marking a 2% increase from August 2024 with 30 more cases, but a 7% decrease compared to September 2023.
Breakdown by Insolvency Type:
Creditors’ Voluntary Liquidations (CVLs):
1,575 cases, up 2% from last month.
Compulsory Liquidations:
226 cases, reflecting a 18% drop from August and down 13% year-on-year.
Administrations:
155 cases, showing a sharp 40% increase from August, as more businesses seek recovery solutions.
Company Voluntary Arrangements (CVAs):
17 cases, down 15% from August, though CVAs have risen 55% over the past year.
Month-on-Month Changes (August to September 2024):
- Compulsory Liquidations: Down 18%
- Creditors’ Voluntary Liquidations: Up 2%
- Administrations: Up 40%
- CVAs: Down 15%
Recent Developments in the Construction Industry
The construction industry continues to be disproportionately affected, experiencing 4,310 insolvencies in the 12 months leading to August 2024, making up 17% of all insolvency cases.
A key event in September 2024 was the collapse of ISG, a major construction firm that entered administration. The insolvency of ISG, likened to the Carillion collapse of 2018, has underscored the fragility of the sector.
Contributing Factors Affecting the Construction Industry:
- Tight Funding: Businesses face limited access to working capital, exacerbated by high interest rates.
- Rising Costs: Increased labour costs are squeezing already thin profit margins
- Supply Chain Pressures: Extended payment terms are straining suppliers.
- Labour Shortages: The industry continues to grapple with a lack of skilled workers.
Year-on-Year Trends:
Compared to September 2023, overall insolvencies are down 7%, with compulsory liquidations falling 13%. However, administrations have risen by 19%, signalling a shift in how companies are handling financial distress.
Staying Ahead of Early Warning Signs
At times like these, it’s crucial to remain proactive. We encourage all credit management teams across industry to stay vigilant and monitor early warning signs of financial distress. Having the right tools and insights can help minimise debt and maximise cash flow.
Get in Touch
To learn how we can help your business, call us today to speak with one of our experts on 01527 503990. Let’s work together to navigate these uncertain times.