Cornwall businesses in ‘significant’ financial distress

More than 3,200 Cornish businesses found themselves in ‘significant’ financial difficulty in the second quarter of 2022 (April-June), according to the latest figures from ‘Red Flag Alert’ by Begbies Traynor, which monitors the financial health of UK businesses .

These figures represent a 1% drop in the number of businesses in difficulty between the first and second quarters of 2022 and a 16% drop year-on-year compared to the same period in 2021.

However, when looking at the sector picture, there is evidence that some industries in the region continue to struggle, with Manufacturing and Health & Education seeing the largest quarterly increases, with respective increases of 6% and 5% between the first and second quarter of 2022.

Nationally, the latest Red Flag Alert research for the second quarter of 2022 recorded 582,452 businesses in high difficulty as businesses continue to be hit by rising inflation, rising labor prices labor, materials and energy and declining consumer and business confidence.

Evidence of this financial distress comes in the form of County Court Judgment (CCJ) data, arguably a harbinger of future insolvency, which revealed 46,235 rulings in the first six months of 2022. , up 5% from the first quarter, as creditors tried to collect debts.

This compares to 59,042 CCJs for the whole of 2021, with this year-to-date figure increasing as the court backlog clears and debts are pursued.

Commenting on the figures, Scott Kippax, a partner at Begbies Traynor in Cornwall, which has an office in Truro, said: “While the number of struggling businesses has leveled off somewhat in Cornwall, a combination of economic problems has caused wreaking havoc in reducing both business and consumer confidence.

“Many companies that are already struggling continue to struggle in a climate of rising costs, but the environment will only get worse, not better, at least until next year.

“I fear it will be a difficult fall as the companies that have struggled for so long are finally overwhelmed.

“That’s why it’s so important that any business facing financial difficulty, for whatever reason, consults a professional to fully understand the options available.”

Sarah J. Greer