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Survey by FRP Advisory: Post-recession hangover will linger warns the professional services sector
A recent poll by restructuring, recovery and insolvency specialists, FRP Advisory LLP, shows that the majority of professionals surveyed, in the financial and legal sectors, believe the worst effects of the recession are still with us.
Commenting on the findings, Nick O’Reilly, Client Service Director at FRP Advisory, said: “The slow recovery, threat of spending cuts and general uncertainty are all taking their toll on business; and despite the better than expected growth in the second quarter the Treasury remains only “cautiously optimistic.”
“This means the worst effects of the recession: unemployment, low confidence and flattened performance remain and are likely to linger for some time.”
According to Nick, one of the most surprising aspects of the recovery is the steady drop in insolvencies. “On coming out of recession, we usually see a jump in insolvencies – often caused by companies over-leveraging, but this time we’ve seen a decrease. This could be due to the nature of this recovery, businesses are being far more cautious and so over-leveraging is unlikely, or it could be because banks are falsely propping up companies and, once a more robust trading environment returns, they may drop them in favour of other opportunities that will yield a quicker return on their money.”
The survey also asked whether the Emergency Budget would aid the UK’s economic recovery. The responses suggest a “jury’s out” sentiment; 43% believe it will, 23% don’t think it will help and 34% weren’t sure. Nick continues: “Though largely positive, there were of course mixed reactions to the Budget across the business community, which these results demonstrate. The commitment to reducing the deficit rallied business and investor confidence, however, the reality of the cuts and increase on VAT will inevitably have a negative impact in the short-term, particularly on the small to medium enterprise sector.
“The ever changing economic landscape makes it even more important that managers get the right advice at the first signs of any trading difficulties. With a still reticent lending community, companies need to be on the front-foot with sound business planning and cash flow forecasts, should they be making any approach for funding.”
Contacts for FRP Advisory:
Kate Macnamara, Grayling, Tel: +44 (0)121 265 2761, Mobile: +44 (0)771 422 2793, Email: kate.macnamara@
Georgina Swain, Director, FRP Advisory Press Office, Tel: +44 (0) 207 467 4297, Mobile: +44 (0) 7881 523 345, Email: georgina.swain@
About Nick O’Reilly
Nick O’Reilly started his insolvency career in 1980 at The Insolvency Service. Nick qualified as a certified accountant in 1987 and became a lecturer in financial management and taxation. In 1991 Nick returned to insolvency, joining Rothmann Pantall, where he was made partner in 1993. In October 2001 Nick O’Reilly joined Levy Gee, which then was acquired by a FRP predecessor firm, before moving across to FRP Advisory, following a management buy-out in 2010.
Nick O’Reilly lectures widely on all aspects of business recovery, and firmly believes in the value of financial education. He has particular skills in the leisure and healthcare sectors and has acted for the Crown Prosecution Service and HM Customs & Excise in Confiscation and Restraint Order Receiverships.
Nick O’Reilly is well placed to offer comment on all aspects of personal and commercial insolvency issues. Following a year as President of R3, Nick O’Reilly continues to play an active role in steering policy and regulatory issues affecting the recovery industry.
To speak with Nick O’Reilly, please contact a member of the FRP Advisory press team listed above.
About FRP Advisory
FRP Advisory LLP is focused on creating, preserving and recovering value for its clients.
The firm offers a comprehensive suite of services to the mid-market and financial community. These focus on enhancing the performance of businesses, as well as saving businesses in distress.
Services include: commercial & asset finance, corporate insolvency, restructuring, independent business reviews, interim management & placement services, personal insolvency & advisory, creditor services, insolvency investigation services and banking live-side support.
With 28 partners and 200 staff, FRP Advisory is one of the largest restructuring, recovery and insolvency firms in the UK, operating out of 9 locations including London, Bexleyheath, Hornchurch, Birmingham, Manchester, Leicester, North East, St Albans and Worthing.
To find out more, visit www.frpadvisory.com
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FRP Advisory LLP offers a comprehensive suite of restructuring, recovery and insolvency services to the mid-market and financial community. FRP Advisory is focused on enhancing the performance of businesses, as well as saving businesses in distress.