The number of Yorkshire and North East businesses entering administration remained steady during April according to research by KPMG.
According to new analysis from KPMG's Restructuring practice, eight Yorkshire and North East businesses fell into administration in April 2020.
In the first quarter of the year, business administrations in Yorkshire and the North East increased by more than a quarter (27 per cent) compared to the previous quarter last year, with 47 recorded between January and March.
However, when compared to the same period at the beginning of 2019, administrations fell by more than a tenth (11 per cent), down from 53.
Howard Smith, associate partner at KPMG in Leeds, said: "Comfort can be taken from the fact that we haven't yet seen the deluge of companies falling into administration across the region that looked likely before the government’s support measures, particularly the Coronavirus Job Retention Scheme, were announced. In most cases, the government's support measures have been complemented by a supportive approach from lenders and creditors, and this has given organisations vital breathing space in these early days of the crisis.
"The proposed changes to insolvency legislation, which include the suspension to wrongful trading rules, are also likely to help relieve the pressure on directors, many of which have chosen to cut back trading and/or enter hibernation where they may previously have had little choice but to appoint administrators.
"As we look forward, the old adage that 'more companies fail coming out of a recession than fail going into it' will be front of mind for many executives who now are trying to forward plan their exit from lockdown. One of the biggest challenges facing businesses in our region is mapping how demand will build as lockdown rules are eased. Yorkshire and North East businesses will need to take care not to fall into the classic trap of scaling up too quickly."
On a national level, 61 companies fell into administration during April 2020 compared to 91 in April 2019. In total, there were 444 insolvencies during the first four months of 2020, down five per cent from the 468 seen between January and April 2019.
Sourced from Insider Media Limited - written by Stephen Farrell