Begbies Traynor Group PLC - Manchester-based corporate rescue and recovery practice - Reports more companies in financial distress in the first quarter of 2022 than a year ago. Companies saying they are in distress rise by 19% over a year ago, driven by a 51% increase in the construction sector and 42% rise among bars and restaurants.

‘The effects of increasing costs are now starting to take their toll on businesses and consumers alike. For the first time in more than a decade, inflation is the prime concern for businesses,’ comments Chair Ric Traynor in a press release. ‘This could mean that companies which have just been surviving, being kept alive only by government support, finally succumb to the inevitable,’ Traynor adds. Consumer demand will likely slow, especially from October due to expected rising energy costs, he says.

Begbies Traynor has examined the financial health of British companies for the past 15 years, the firm explains. Credit voluntary liquidations, a type of corporate insolvence, have more than doubled in March compared to March 2021, the company says. The research ‘highlights the strain two years of extraordinary financial pressures have had on thousands of UK companies,’ the company says.

‘There is now a growing risk of a wave of insolvencies affecting vulnerable British businesses,’ Begbies adds.

One way to mitigate cost pressures off businesses could see the UK government supporting them through ‘leniency in repaying pandemic funding,’ Julie Palmer, partner at Begbies Traynor, says.

Current stock price: 117.06 pence, up 6.3% on Friday

12-month change: up from 117.00

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