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One in five businesses in financial stress

More than 20% of UK businesses are financially stressed, research from financial services firm KPMG suggests. 

The retail sector had the largest number of companies in financial distress, followed by leisure and hospitality. A total of 16% of retailers are financially stressed, and 4% can be classed as distressed. In volume terms, this equates to more than 450 stressed retailers and around 100 distressed.

The research analysed filings of all UK businesses with revenues in excess of £10m over a five-year period to the end of 2018. 

Over the period, the proportion of businesses in financial stress rose from 19% in 2014 to 21% in 2018, an increase of 1,400 businesses (4,300 to 5,700). 

Research also found that 1,000 companies are in situations of acute distress, an increase of 8.9% over the past five years. 

“Consumer attitudes towards spending remain in a huge state of flux,” said Blair Nimmo, head of restructuring at KMPG in the UK. “We continue to have more choice over what to spend our money on, and where to spend it, yet remain cautious in doing so – no doubt due to sluggish wage growth and wider economic uncertainty.

“Mix fragile consumer confidence with the burden of high rents, business rates and increased labour costs, and it’s clear that many of those who operate on the high street will continue to tread the find line between stress and distress over the year ahead.” 

 

 

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