The latest statistics from the Insolvency Service for Q4 2013 have shown administration appointments rise by 18 percent (from 544 in Q3 2013 to 642 in Q4 2013), with the real estate sector seeing appointments increase by 57 percent (from 141 in Q3 2013 to 222 in Q4 2013). The hotel and restaurant sector also saw an increase of 50 percent in administration appointments (from 23 in Q3 2013 to 48 in Q4 2013).
Mark Firmin, restructuring partner at KPMG, commented: “The sharp increase in administration appointments for the last quarter of 2013 will come as a surprise to many, running counter to the increasingly numerous positive economic indicators. It is perhaps even more surprising that the property sector, which is purportedly enjoying another boom, saw such a marked increase in administration appointments at the end of the year.
“The numbers should not necessarily set the hares running as history has taught us that many businesses, perhaps counter-intuitively, struggle to survive when economies pick up again as over-trading tips them over the edge. However, the numbers do represent a cautionary warning that we should not herald a full recovery just yet. It is certainly true that pockets of the South East are seeing huge increases in property values but this is not the story of the UK property market overall.
“While the volume of administration appointments in the hotel and leisure sector is a fraction of the number of overall appointments in the property sector, the large increase shows that this sector is still struggling to put down the roots of recovery.”
The overall insolvency statistics, including liquidations (which typically affects smaller companies and is a wind up procedure on larger companies) and receiverships were down 7 percent. The level of administration appointments is the barometer used by restructuring professionals to measure the level of insolvency activity in England and Wales.
For further information please contact:
Angela Pink, Press Officer, KPMG: 020 7694 2679
KPMG press office: 020 7694 8773
Notes to editors:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.