February UK business insolvencies down 15 per cent year-on-year

April 8, 2010 - PRLog -- The total number of insolvencies fell by 15.1 per cent during February compared to the same month last year - from 2,160 in February 2009 to1,834 in February 2010 bringing the rate of insolvencies down from 0.11 per cent to 0.10 per cent.  In comparison to the insolvency rate recorded in January (0.08 per cent), it was an increase. However, January has in previous years been a quiet month for insolvencies and despite the January to February increase, it still follows an overall downward trend.  The overall financial strength score[1] of UK businesses continued to improve, from 79.76 in February 2009 to 81.18 in February this year. The score also saw a small month-on-month improvement from 81.16 in January.  Rolf Hickmann, Managing Director of pH, an Experian company, said: Small businesses have far more flexibility than any other business type. It is easier for smaller businesses, with just one or two employees, to easily make adjustments to their operations and pull in the reins when times are difficult. For larger business, there is the security that comes with size and a well established structure, so insolvency rates among these business types are also low.  However, mid sized businesses, which are seeing the highest rates of insolvencies, are too large to be flexible and too small to rely on a strong and established structure.

Other key highlights include:

· Although the North East region saw the highest rate of insolvencies, it was also one of two regions to see the highest improvement, from an insolvency rate of 0.20 per cent in February 2009 to 0.15 per cent in February 2010. The other region to see the biggest year-on-year improvement was Wales (from 0.14 per cent to 0.08 per cent).  · The Greater London region continued to be the region where businesses had the lowest financial strength score compared to other regions. However, it was also the region to see the biggest year-on-year improvement from 78.11 in February 2009 to 79.99 in February 2010.  · The largest companies, those with 501 or more employees, saw the greatest improvement year-on-year in the insolvency rate (from 0.20 per cent in February 2009 to 0.10 per cent).   · The smallest businesses (with 1 to 2 employees) saw the most improvement in their financial strength scores from 80.50 in February 2009 to 82.48 February 2010.  · The financial strength of businesses in the IT industry rose from 80.61 in February 2009 to 83.60 the biggest improvement compared to other sectors.  · Businesses in the oil industry held the highest financial strength score during February 86.31.  [1]The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.

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