Agri businesses in good shape, defying cross-sector gloom

December 20, 2019

East of England agricultural businesses are outperforming their regional counterparts as new research reveals that they have one of the lowest levels of elevated insolvency risk in the UK.

November figures compiled by insolvency and restructuring trade body R3’s Eastern branch, using Bureau Van Dijk’s Fame database, show that around one in three – 32.9 per cent – are at higher than normal risk of insolvency, which is one of the lowest statistics for the sector in the UK. Only London and the North East have lower percentages.

 

Wales has the highest percentage at 45.3 per cent, which is over nine points above the UK average of 36.2 per cent.

 

In contrast, the news is less positive for many of the other key sectors monitored across the region by R3. The Eastern construction sector, for example, has the third highest proportion of operators at above average risk when compared with other UK regions.

 

Almost half – 45.6 per cent – have an elevated risk of insolvency, which is around two percentage points above the UK average of 43.7 per cent. Only the South East and South West have a higher percentage of construction businesses at elevated risk of insolvency, with levels of 47.2 per cent and 47.8 per cent, respectively.

 

R3’s research also indicates that 37.4 per cent of Eastern hotel companies were judged to be at elevated insolvency risk in November, which is over five percentage points above the UK mean of 32 per cent. The picture is similar for the region’s restaurant operators, with 35.2 per cent at heightened risk of insolvency compared to the UK average of 32.9 per cent, a gap of over two percentage points.

 

R3 Eastern Chair Mark Upton, a partner at Ensors Chartered Accountants in Cambridge, said: “It is encouraging to see local agricultural businesses outperforming their national competition but the regional picture overall is no cause for celebration. 

 

“We have to be realistic that the East of England, and the UK as a whole, continues to face some strong economic challenges.

 

“Uncertainty and stop-start stockpiling are among the factors hitting local investment and wider business health, and members of the insolvency and restructuring profession report anecdotally that they are seeing increasing numbers of companies worrying about their cashflow levels and order books.

 

“Company directors who are concerned about their business or the market conditions they are operating in should seek advice from a knowledgeable and qualified professional source. The earlier they do, the more options they will have in terms of business rescue.”

 

Source: Business Weekly

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