Sussex insolvency-related activity decreases but pressures remain

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Insolvency-related activity has decreased slightly in the South East, including Sussex, says R3, the UK’s insolvency and restructuring trade body.

R3’s analysis of data provided by Creditsafe showed a minor drop in insolvency-related activities from 211 in November to 203 in December.

The figures include administrator and liquidator appointments together with creditors’ meetings.

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This number is significantly lower than October’s 293 which was the highest figure since March 2022.

BUSINESS PRESSURE: Neil Stewart, chairman of R3’s Southern and Thames Valley region, says despite a small reduction in regional insolvency-related activity, the business climate remains unpredictableBUSINESS PRESSURE: Neil Stewart, chairman of R3’s Southern and Thames Valley region, says despite a small reduction in regional insolvency-related activity, the business climate remains unpredictable
BUSINESS PRESSURE: Neil Stewart, chairman of R3’s Southern and Thames Valley region, says despite a small reduction in regional insolvency-related activity, the business climate remains unpredictable

The South East figure for insolvency-related activities is the sixth highest in the UK, behind Greater London, which has 598, the North West 420, East Anglia 318, Yorkshire & Humberside 231 and the West Midlands 222.

The findings also revealed the number of firms in liquidation which owed money to their creditors in the South East has risen from 243 in November to 273 in December.

Neil Stewart, chairman of R3’s Southern and Thames Valley region, said that while December’s insolvency-related figures appeared positive, the UK’s businesses were facing mounting pressures and ongoing cost challenges.

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“Businesses have faced years of rising outgoings and falling margins since the pandemic, and now have to work out how they will fund further increases in wages and National Insurance as a result of the Chancellor’s national insurance plans” he said.

“If companies in some sectors, particularly retail and leisure, did not enjoy a festive bounce in trading figures, which is largely still to be reported, I fear we will see more insolvencies in the early months of 2025.”

The British Retail Consortium reported growth of only 0.4% for the last three months of the year over 2023 and Barclays said consumer spending on debit and credit cards was flat in December.

Bright spots were supermarket Aldi reporting December sales 3.4% up at £1.6bn and at Lidl revenue was up 7% at £1bn. However, Next has announced price rises to offset wage and tax increases.

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Neil said: “We are likely to see rising living costs dictate that cautious consumer spending will continue, which, when added to increases in employer National Insurance contributions and a higher National Living Wage, is likely to lead to less investment, stifled growth, and job cuts.

“The latest statistics show that in the Southern and Thames Valley region we are faring rather better that some parts of the UK, but the economic outlook remains volatile.”

R3’s Southern & Thames Valley region includes Kent, Surrey, Sussex, Buckinghamshire, Oxfordshire, Hampshire, the Isle of Wight, Dorset, Wiltshire and Berkshire.

Neil, a Regional Associate Director at insolvency litigation financing company Manolete Partners Plc, added: “Business leaders across the South and Thames Valley need to remain alert and seek expert help, guidance and support when warning signs of business distress appear.

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“The earlier such issues are addressed the more options are available, the more time directors and decision makers have to decide their next steps, and the greater the chances of recovery.”

“Most R3 members will offer a free consultation to prospective clients, so they can improve their understanding more of the situation and outline the available routes to improve it.”

The latest Creditsafe data shows a relatively static picture in the number of companies with invoices that had gone past their payment date up slightly from 58,753 in November to 58,910 in December – marginally the second highest figure this year.

Meanwhile, the number of invoices which had gone past their due date in the region has risen from 534,329 in November to 541,019 in December.

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The number of start-ups in the South East continues to fall, from November’s 4,977 to 4,301 in December. April’s 8,050 was the year-high.

Creditsafe is a multinational business intelligence provider with services including company credit scores and credit report information.

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