Scottish business bankruptcies up 46% in six months

According to a new badysis, the number of companies declared insolvent in Scotland has increased by 46% in six months.

KPMG said the trend was economic volatility, with Brexit creating uncertainty for companies.

The professional services firm advised companies to prepare for the worst case scenarios and to be fiscally prudent.

He said that there had been 698 company insolvency appointments between January and June, up from 479 in the previous six months.

Of these 698 cases, the vast majority (661) involved a business liquidation, while 37 were appointments to administration and receivership.

The number of bankruptcies in the quarter ending June 30 is similar to that of the same period last year.

"Climate of uncertainty"

Blair Nimmo, head of restructuring at KPMG, said: "If there is a clear upward trend in business bankruptcies, there are signs of resilience.

"The last quarter has remained a lot more static and a number of industries have taken proactive steps to stabilize on a more stable financial basis, including retailers, in the hope that the proposals will continue. Voluntary business arrangements could dismiss the prospect of an administration.

"The current discussions on Brexit and the change of prime minister and cabinet have certainly created a climate of uncertainty, but broader challenges are at stake, creating a toxic mix of problems for businesses in times of distress. . "

"The best approach for any business in Scotland today is to maintain a prudent financial approach, ensuring that reserves are maximized, proactively and regularly reviewing contingency plans, and ultimately – with worst-case scenarios. .

"A number of challenges may be on the horizon, but with a resilient and focused approach, including taking the appropriate advice at an early stage, the Scottish business community can continue to develop in a sustainable way in the near future. long term."