Legal and Finance: Banks Deserve Credit for Decline in Receiverships
A marked decrease in the number of receiverships recorded in 2000 suggests an enlightened attitude from lenders and creditors rather than economic well-being, according to accountancy firm Grant Thornton.
Statistics showed that the total number of UK receiverships went down from 967 in 1999 to 872 in 2000, with several sectors, including the embattled retail sector and construction industry, reporting a significant improvement on the previous years' disappointing performance.
But, while the fall in receiverships is cause for optimism, any decrease is counterbalanced by a national increase in 'turn-around' situations, warned Andrew Menzies, recovery and reorganisation services partner at Grant Thornton in Birmingham.
He said: 'Banks have become the standard bearers for the new turn-around culture, and figures showing a ten per cent fall in receiverships, suggest their attempts to salvage troubled businesses are bearing fruit.
'We can't, however, predict if this will continue should the storm clouds of recession prove a reality.'
The figures for 2000 also show that improved business performance is sector specific and that, despite a general downward trend in the number of companies going to the wall in 2000, some industries recorded consistently high business losses last year while others even bucked the trend by going into receivership in greater numbers than in previous years.
Volatile sectors include:
The printing industry, where over capacity and an increasingly competitive high-tech marketplace have made it a case of survival of the fittest, recorded 38 receiverships in 2000 compared to 40 in 1999. …