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Q2 Insolvency Figures 2018

  • 31/07/2018
  • Jane Bray

The latest business insolvency figures for Q2 2018 (April to June) have been published and indicate that in England and Wales, the number of company insolvencies has fallen 12.4% compared to 2018 Q1 but has risen 12% compared to the same period last year.

A total of 3,918 companies entered insolvency in Q2 2018. 2731 of these were in the form of Creditor’s Voluntary Liquidations (CVLs), 752 compulsory liquidations and 435 other insolvencies.

The number of CVLs fell by 0.5% compared to Q1 2018, but rose by 14.6% compared to 2017 Q2 figures. The number of compulsory liquidations in Q2 2018 fell by 4.0% on the previous quarter, but rose by 14.6% from Q2 2017.

In Q2 2018, 115 companies entered creditor's voluntary liquidation following administration, an increase of 30.7% on the same quarter of 2017.

The peak in the number of companies entering creditors’ voluntary liquidation following administration was seen in early 2010. This is in contrast to the peak of liquidations as a first insolvency procedure, which was in 2009. This is because the usual length of an administration is one year (though it can be extended for a further six months), and the number of administrations peaked in late 2008 / early 2009.

In the 12 months ending Q2 2018, 0.49% of active companies (or one in 205 of all active companies) went into liquidation, up slightly from 0.48% in the 12 months ending Q1 2018.

Up until Q3 2016, there had been a downward trend in the rates from 2011, with the lowest liquidation rate recorded in Q3 2016 since comparable records began in 1984. Since Q4 2016 there has been a small increase in the company liquidation rate which was largely driven by bulk insolvencies. Excluding these, the underlying liquidation rate was 0.39%

In Q2 2018 there were 341 administrations, 6.6% lower than in Q1 2018 but 4.0% higher than the same period in 2017. The trend has been broadly stable since Q2 2014.ranging from a high of 387 to a low of 305.

There were 94 company voluntary arrangements (CVAs) in Q2 2018, 7.8% lower than the previous quarter but 10.6% higher than Q2 2017, It should be noted that, because numbers of CVAs are low, any small changes will result in large percentage changes, and the latest statistics are in line with the trend observed since Q1 2015.

In Q2 2018 there were no administrative receiverships. Since 2012 there have tended to be fewer than 10 cases per quarter. This because use of this procedure is restricted to certain types of company or to floating charges created before September 2003. Again, any small changes will result in large percentage changes.

Excluding bulk insolvencies, the construction industry had the highest number of insolvencies in the 12 months ending Q2 2018, followed by the wholesale and retail trade & repair of vehicles industrial grouping.