TIDMBEG
Begbies Traynor Group PLC
24 October 2016
24 October 2016
UK businesses remain resilient in the face of Brexit
Levels of financial distress fell 6% in three months following
the Brexit vote
Construction and professional services sectors saw biggest
reduction in financial distress
UK businesses across nearly every sector of the economy were
showing positive signs of stability following the EU Referendum,
new research from Begbies Traynor, the UK's leading independent
insolvency firm, reveals.
According to Begbies Traynor's Red Flag Alert research for Q3
2016, which monitors the financial health of UK companies, in the
three months following the EU Referendum, levels of 'Significant'
financial distress among UK businesses fell as the economy showed
resilience in the face of Brexit.
The research reveals that levels of 'Significant' distress fell
by 6% during the past three months, from 263,517 struggling
businesses in Q2 2016 down to 248,916 companies in Q3 2016. 92% of
these companies, or 229,620, were SMEs in Q3 2016.
Meanwhile, year-on-year the number of UK businesses suffering
'Significant' financial distress fell 2% across the economy as a
whole. This new data chimes with recent ONS data which reported
that Brexit has had no major effect on the UK economy thus far.
Ric Traynor, Executive Chairman at Begbies Traynor says:
"Overall, the UK economy appears to be in a stronger position
than expected following the EU Referendum result. While we wait to
see whether the Government opts for a 'hard' or 'soft' Brexit
strategy, businesses at least appear to be better placed to tackle
any new challenges on the horizon ahead of the Government's
imminent negotiations.
"However, given that the details of the future Brexit deal are
as yet unknown, it is still too early to tell what longer term
impact the 'Leave' decision might have on the UK economy. Clearly
though, the stronger the UK economy becomes pre-Brexit, the better
it will be able to withstand any post-Brexit shocks."
According to Begbies Traynor's research, the most marked
improvement in financial health during Q3 2016 was within the UK
construction sector, where the number of companies experiencing
'Significant' distress fell by 11% to 28,917 (Q2 2016: 32,311
companies).
The findings echo the recent construction PMI, which was 52.3 in
September, up from 49.2 in August, indicating that the sector is
expanding.
Julie Palmer, Partner at Begbies Traynor says:
"Our data shows that UK construction firms appear to be bouncing
back after the initial Brexit shock, when in July construction
activity initially shrank at its fastest pace since 2009. The good
news for this sector is that these businesses can also expect a
further boost following recent policy announcements including the
GBP3 billion Home Builders Fund, plans to accelerate construction
on public land and the unlocking of brownfield sites across the
country.
"All eyes now turn to the upcoming Autumn Statement where
further announcements are expected in support of SME developers and
increased infrastructure spending. If implemented, these measures
should put UK construction firms in an even better position to
survive any potential fallout from the Brexit negotiations."
Begbies Traynor's research also found that professional services
firms had the second most improved levels of 'Significant'
financial distress during Q3 2016, falling by 10% to 11,745
companies (Q2 2016: 13,031 companies).
Julie Palmer, Partner at Begbies Traynor says:
"Professional services firms have been in high demand following
the Referendum result, contributing to lower financial distress
across the sector. Law firms and management consultancies are
benefitting most thanks to an influx of new projects from clients
looking for help in navigating the current Brexit uncertainty and
the potential legislative changes that may come into force once the
UK leaves the EU.
"However, challenges still remain for the sector over the long
term, as any negative impact on the UK economy following a Brexit
deal could dampen future transactional activity - one of the most
lucrative sources of income for many large professional services
firms."
- Ends -
For further information contact:
MHP Communications
Katie Hunt / Jade Neal / Giles Robinson / Hannah Winter
Tel: 0203 128 8193
Email: Begbiescorporate@mhpc.com
About Begbies Traynor Group
Begbies Traynor Group plc operates from over 40 UK locations
through two operating divisions:
Begbies Traynor is the UK's leading independent business
recovery practice handling the largest number of corporate
appointments, principally serving the mid-market and smaller
companies. We provide a range of specialist professional services
primarily to businesses, their professional advisors and the major
banks covering insolvency, restructuring and risk management
activities.
Eddisons is a leading UK firm of chartered surveyors, offering a
wide range of specialist services to banks, insolvency
practitioners, and owners and occupiers of commercial property. The
core services offered are valuation and disposal of property
including fixed charge property receiverships; valuation and
disposal of machinery and business assets; auctions; insolvency
insurance brokerage; property and facilities management; and
building consultancy and ratings valuations.
Information on Begbies Traynor Group can be accessed via the
Group's website at www.begbies-traynorgroup.com
About Red Flag Alert
Red Flag Alert measures corporate distress signals through a
comprehensive and complex methodology, drawing on factual legal and
financial data from a wide range of relevant sources for companies
that have been trading for over a year.
The release refers to the numbers of companies experiencing
'Significant' problems, which are those with minor CCJs (of less
than GBP5k) filed against them or which have been identified by Red
Flag's proprietary credit risk scoring system which screens
companies for a sustained or marked deterioration in key financial
ratios and indicators including those measuring working capital,
contingent liabilities, retained profits and net worth.
Red Flag Alert is commercially available to all businesses, on
an annual subscription basis, to help them better understand risk
and exposure and help prepare them for the future. Further
information about Red Flag Alert can be found at:
www.redflagalert.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
NRAQFLFLQBFZFBB
(END) Dow Jones Newswires
October 24, 2016 02:00 ET (06:00 GMT)
Begbies Traynor (LSE:BEG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Begbies Traynor (LSE:BEG)
Historical Stock Chart
From Apr 2023 to Apr 2024
