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Less distress for firms across the south-east
4:08pm Wednesday 30th April 2014 in News
BUSINESSES across the south are reporting a jump in profits, while fewer firms are finding themselves in deep water, new research shows.
R3, the trade body for insolvency professionals, has published new research showing a third of businesses in the south east are now experiencing increased profits.
That is up from 20 per cent in October, while the percentage of companies reporting an increase in market share has almost doubled in the same space of time, from 22 per cent to 41 per cent.
R3 has been tracking five indicators of business distress since March 2012, including decreasing profits, sales volumes or market share, the regular use of overdraft facilities and new redundancies.
And the body’s research shows that the number of firms in the south east showing none of those signs of distress has risen from 36 per cent in March 2012 to 47 per cent in October and 58 per cent now.
But the region is still well behind Yorkshire and the Humberside, which is the best performing region for lack of distress, with 92 per cent of firms not in trouble.
Only Wales and Northern Ireland actually have fewer businesses with no signs of distress than the south east.
James Stares, chairman of R3’s Southern Committee, said: “While it’s encouraging to hear that businesses in the south east are seeing increased profits and market share, it’s surprising that the region isn’t faring as well as its counterparts in other parts of the UK.
“Despite that, business distress in the south east has tumbled over the past two years as firms have got over the worst of the recession.
“Historically, business failures increase as the economy bounces back: rapid economic growth can be a problem for a business that used up cash reserves in a recession or isn’t prepared.
“However, low interest rates and the much slower recovery have brought struggling businesses time to sort out their problems.”
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