Financial resilience displayed on the Humber
By Hull Daily Mail | Posted: 29 Apr 2019
Businesses in the Humber region are displaying financial resilience in the face of continuing uncertainty over Brexit, according to the latest research from insolvency specialist Begbies Traynor.
The latest quarterly Red Flag Alert data released today reveals that there has been no change in the number of businesses in the region displaying ‘significant’ distress in Q1 2019 since the final quarter of 2018, with the total number of firms with ‘significant’ financial problems in the area standing at 1,318.
Year on year, distress among firms – and across the UK as a whole – had risen by 2 per cent, while firms in the Humber region saw no change in the total number of distressed businesses. The ‘significant’ distress figures relate to businesses with minor CCJs filed against them, or those showing a marked deterioration in key financial ratios, and are often seen as early warning signs of more serious financial problems ahead.
Some industry sectors are faring worse than others however, with the region’s real estate and property services showing a 16 per cent increase in ‘significant’ distress year on year, affecting 130 businesses.
Read more: Humber LEP helps businesses get Brexit-ready
Food and beverage producers saw a 33 per cent climb in distress levels year on year with 36 businesses affected, while food and drug retailers saw distress increase by 9 per cent to affect 61 companies in the region.
Sectors faring better in the Humber included hotel and accommodation, which saw a 29 per cent decrease in distress year on year, and media firms, with an 18 per cent year-on-year decrease.
Andrew Mackenzie, partner at Begbies Traynor, Hull, said: “Uncertainty continues to cast a long shadow over the economy with any potential agreement on a Brexit deal now kicked further down the road. In the Humber region, as across the economy as a whole, firms are quite sensibly hitting the brakes and putting on hold capital investment such as in new plant machinery or technology.
“While it is encouraging to see the apparent resilience of firms in the region, all businesses, and particularly SMEs, would do well to keep a tight rein on cash flow in this prolonged and unpredictable situation.”