Calls for assistance from businesses in troubled sectors most have soared almost threefold in the past six weeks at Tenon Recovery, the accountancy firm's turnaround, restructuring and insolvency arm.
The company has seen its 'like-for-like' volume of enquiries from concerned business owners jump from around 750 during October and November to closer to 2,000 as the Christmas period approaches.
“The symptoms we are seeing now are a precursor to a potential epidemic of insolvencies in 2009,” said Carl Jackson, head of Tenon Recovery.
"We have not seen a significant spike in the [official] insolvency stats but my expectation is that we will see a significant increase in the first quarter of next year."
Jackson
said the most calls for help were coming from retail, restaurant, motor-industry, property and leisure businesses. He identified the major indicators of a business approaching crises as a weak equity base, low profits or a move into losses, high leverage particularly if its comes after recent acquisitions, weak management and dependence on one or just a few key customers.
The Insolvency Service's official figures show that there were 4,001 compulsory company liquidations and creditors' voluntary liquidations in England and Wales in the third quarter, up 26% on the same period last year.
© Crimson Business Ltd. 2008