The latest statistics released by the government show the number of companies entering insolvency fell 2.7% since the same period last year. Compared to the first quarter of 2016, the number of insolvencies decreased 4.2%.
Looking at the different insolvency procedures , the number of companies wound up compulsorily fell 14% since the same time last year – a significant factor in the overall drop in company insolvencies.
There were slightly more companies going into creditors voluntary liquidation (CVL) than in Q2 2015 – a 0.7% increase. Figures have been fairly stable over the last few years.
Despite the slight increase, the estimated liquidation rate in the year leading up to Q2 2016, was the lowest level since records began in 1984 – set at 0.42% of active companies.
However, the number of companies entering administration dropped 8.7% since the same time last year. Compared to Q1 2016, the number actually rose 8.2%, indicating a considerable increase of companies going into administration in the last few months.
There was a 35.3% increase in companies entering a CVA since the same period last year, a positive sign that more companies are embracing the turnaround culture and choosing to seek financial help and restructuring before it is too late.
As reported yesterday, with figures from AiB, the number of Scottish companies entering receivership, compulsory or creditors voluntary liquidation increased. Today’s results from the government reveal there were 33 Scottish companies that entered administration in that period, as well as six CVAs.