Critical worries for firms
Jan 22 2009 by Henryk Zientek, Huddersfield Daily Examiner
A BIG increase in the number of Yorkshire firms facing critical cash problems has been reported.
The latest Red Flag Alert report from Begbies Traynor insolvency experts showed that 551 companies in Yorkshire and the North-East faced critical problems during the fourth quarter of 2008.
This was 81% up on the 306 firms in similar difficulties for the same period of 2007.
But Julian Pitts, of Begbies Traynor, said: “Compared with the rest of the country the region has seen fewer companies with problems than the national average.”
Firms in critical difficulties are those with county court judgements totalling more than £5,000 or facing winding-up petitions.
The number for firms in the region showing early signs of financial stress averaged 5,501 a month during the final quarter of 2008.
Some 16,500 companies faced significant problems, 41% higher than a year earlier.
Building, property and retail were the worst-hit sectors, with 4,315 companies in the region experiencing significant problems. There were also dramatic increases for the professional services, IT and telecoms sectors.
Mr Pitts added: “The numbers make grim reading and show the extent to which the downturn is reaching more and more industry sectors.’’
He said companies had been hit by the economic conditions and restricted lending.
He said: “Despite the significant funding by Government some lenders are still facing funding problems.
“In many cases major banks are the main source of cash for small and medium-sized firms and many providers are effectively closed for new business.’’