The latest insolvency statistics have been released from the Insolvency Service. The release contains information on companies who are unable to pay debts and face liquidation or enter administration or other company rescue process.
Here we highlight the main messages:
The total underlying company insolvencies increased in Q1 2019. Creditors' voluntary liquidations, administrations and company voluntary arrangements all increased in Q1 2019, while compulsory liquidations decreased. Administrations increased to the highest level for 5 years.
There were 4,187 total underlying company insolvencies in Q1 2019; this is 6.3% higher than in Q4 2018. Compared to the same quarter last year, this was an increase of 5.1%. This is the second highest underlying level of insolvencies in any quarter since Q1 2014. This rise was driven by increases in CVLs which increased by 6.2% compared to Q4 2018 and administrations which were up 21.8%. CVAs also increased by 43.1%. Compulsory liquidations fell in Q1 2019 by 2.7%.
Of the 2,822 creditors' voluntary liquidations in Q1 2019, one of these was due to a late registration from a bulk insolvency event in Q4 2018 when there were 776 bulk insolvencies. In Q1 2019, 67.4% of all company insolvencies ended in CVLs, while compulsory liquidations accounted for 19.6% of all company insolvencies. The proportion of administrations increased to 10.8% in Q1 2019, the highest proportion since Q1 2014.
In Q1 2019 administrations reached the highest quarterly level in 5 years. CVAs increased from last quarter but are down compared to the same time last year.
There were 451 administrations, 21.8% higher than Q4 2018; this was the highest number of administrations since Q1 2014. Compared to the same period last year, there were 26.8% more administrations. In comparison to Q1 2018, CVAs are down by 8.8%. For the fourth consecutive quarter there were no administrative receiverships.
The liquidation rate remains low. In the 12 months ending Q1 2019, 1 in 238 companies were liquidated. In the 12 months ending Q1 2019, for every 10,000 active companies in England and Wales, 42.1 were liquidated. This was slightly up from 41.4 per 10,000 in Q4 2018. Changes in company liquidation rates are related to economic conditions: in periods of economic growth, liquidation rates tend to decrease.
Underlying insolvencies increased across several industries in the 12 months ending Q1 2019. Excluding insolvencies where the industry was unknown, the wholesale and retail trade; repair of vehicles industry grouping saw the largest increase in underlying insolvencies, with 67 extra cases compared to the 12 months ending Q4 2018. This was closely followed by the administrative and support services grouping (66 additional insolvencies); manufacturing (58 additional insolvencies); and the accommodation and food services grouping (57 additional insolvencies). The arts, entertainment and recreation industry saw the largest decrease in underlying insolvencies, with 23 fewer cases compared to the 12 months ending Q4 2018. Excluding bulk insolvencies, in the twelve months ending Q1 2019, the highest number of new company insolvencies remains in the construction industry with 3,013 insolvencies – up 0.6% from the 12 months ending Q4 2018. Administrative and support services were most affected by bulk insolvencies in the 12 months ending Q1 2019.