1 February 2010: Business fail rate down 34%

The latest figures produced by InsolvencyJournal.ie show that the number of companies that went out of business in January 2010 fell 34% compared to those in December 2009. The number shrank from 156, the equivalent of five a day, in December, to 103 in January, when around 3 businesses per day were declared insolvent. The number of businesses declared insolvent fell by 34% in January, compared with the previous month. The figures are, however, still a fifth higher than those recorded for January of 2009, confirming predictions that high levels of insolvency will continue throughout 2010.

Worst affected was Leinster, which accounted for 70% of total insolvencies with Dublin making up 71% of those. Ulster and Connaught were relatively unscathed, with 6% and 7% respectively while Munster accounted for 17%. The findings also demonstrate a significant increase in the number of companies that went into receivership in the first month of the year. Receivers were appointed to 21 companies in January – up 200% on the December 2009 figure, as banks increasingly move to have receivers appointed to recover their debts.

Ken Fennell of Kavanagh Fennell noted that: “December saw a number of notable organisations such as AIB appointing receivers to recover assests linked to a large number of properties owned by the Zoe Group. "A Receiver was also appointed to the Stokes brothers' private member’s club Residence. Overall, the recent findings show that construction is still the worst-affected sector, with 32 firms going out of business in January – 33% of the total. "Insolvencies in the sector, however, were down significantly on previous months, dropping 35% from the December total of 49 which suggests that the industry may be over the worst.”

The report found that all industries, bar the IT sector, noted similar falls in insolvency totals and there was some positive news for the services industry, which suffered 18 insolvencies in January down 42% from the December figure of 31. Despite the problems caused by the cold snap and the slump in trading during the January sales, there was an improvement in retail – down 44% to 10 insolvencies, while hospitality failures almost halved from 24 to 14. The motor trade saw some improvement in January, with only one company being declared insolvent compared to 10 in December 2009, a sign that perhaps the industry may already be benefiting from the car scrappage scheme introduced in the December budget.

Creditors' Voluntary Liquidations accounted for 82% of all insolvencies last month while there were only two court appointed liquidations. January was the second consecutive month during which there were no applications for court protection granted by the High Court. This drop may be explained by demands by the High Court for higher standards in examinerships – reemphasised this month when Mr Justice Peter Kelly turned down the Stokes brothers' examinership application for their private member’s club Residence.Business fail rate down 34%. The latest figures produced by InsolvencyJournal.ie show that the number of companies that went out of business in January 2010 fell 34% compared to those in December 2009.

The number shrank from 156, the equivalent of five a day, in December, to 103 in January, when around 3 businesses per day were declared insolvent.
The figures are, however, still a fifth higher than those recorded for January of 2009, confirming predictions that high levels of insolvency will continue throughout 2010. Worst affected was Leinster, which accounted for 70% of total insolvencies with Dublin making up 71% of those. Ulster and Connaught were relatively unscathed, with 6% and 7% respectively while Munster accounted for 17%. The findings also demonstrate a significant increase in the number of companies that went into receivership in the first month of the year. Receivers were appointed to 21 companies in January – up 200% on the December 2009 figure, as banks increasingly move to have receivers appointed to recover their debts.

Ken Fennell of Kavanagh Fennell noted that: “December saw a number of notable organisations such as AIB appointing receivers to recover assests linked to a large number of properties owned by the Zoe Group. "A Receiver was also appointed to the Stokes brothers' private member’s club Residence. Overall, the recent findings show that construction is still the worst-affected sector, with 32 firms going out of business in January – 33% of the total. "Insolvencies in the sector, however, were down significantly on previous months, dropping 35% from the December total of 49 which suggests that the industry may be over the worst.”

The report found that all industries, bar the IT sector, noted similar falls in insolvency totals and there was some positive news for the services industry, which suffered 18 insolvencies in January down 42% from the December figure of 31. Despite the problems caused by the cold snap and the slump in trading during the January sales, there was an improvement in retail – down 44% to 10 insolvencies, while hospitality failures almost halved from 24 to 14. The motor trade saw some improvement in January, with only one company being declared insolvent compared to 10 in December 2009, a sign that perhaps the industry may already be benefiting from the car scrappage scheme introduced in the December budget.

Creditors' Voluntary Liquidations accounted for 82% of all insolvencies last month while there were only two court appointed liquidations. January was the second consecutive month during which there were no applications for court protection granted by the High Court. This drop may be explained by demands by the High Court for higher standards in examinerships – reemphasised this month when Mr Justice Peter Kelly turned down the Stokes brothers' examinership application for their private member’s club Residence.

Source – Insideireland.ie