2018 was a financially challenging year for many corporates and the final statistics published by the Insolvency Service back this up as the total number of company insolvencies were at their highest level since 2014.
With all the media attention around some of the high-profile liquidations, administrations and CVAs, it is worth mentioning that all company insolvencies increased across the year apart from Administrative Receiverships.
If we look deeper at Q4 2018, the number of Company Insolvencies decreased from the previous quarter. CVLs accounted for most company insolvencies in the quarter (68%), however, do bear in mind that these statistics partly include “bulk insolvencies”.
On the other side of this, CVLs fell by 12.7% on Q3. Of the CVLs registered in Q4 2018, 89 of those were following an Administration process.
Administrations were the stand out procedure for the year as Q4 2018 saw 367 Administrations, a 15.1% rise in comparison to Q4 2017.
Following on from the last quarter, the construction sector had the highest insolvency numbers in 2018. This is partly due to the current political uncertainty with mounting fears around a “no-deal Brexit” which is causing delays to building projects and subsequently slowing growth. This, coupled with rising costs and squeezed margins, explains why 2018 has been such a trialling year for this sector.
It is not beyond the realms of reality that this trend may continue into 2019. With the high levels of recruitment already taking place this year at various Insolvency practices across the UK, it could be possible that there will be even more work for Insolvency practitioners including CVAs and Administrations.