More than 4,000 Shropshire businesses in financial distress

Figures from independent insolvency firm, Begbies Traynor, reveal that Shropshire saw a 14 per cent increase in the number of businesses struggling between the last quarter of 2020 and the first quarter of 2021 to 4,023 – up 35 percent on the same period in 2020.

Nationally, the latest Red Flag Alert research for the first quarter of 2021 has recorded 723,000 businesses in ‘significant distress’, up 42 per cent year-on-year. This represents the largest numerical quarterly increase in financially distressed companies since the Red Flag Alert research launched in 2014 – equivalent to 93,000 ailing businesses.

In Shropshire, businesses in some sectors faced greater financial difficulty than others, including industrial and food and beverage, both increasing 25 per cent between the last quarter of 2020 and the first quarter of 2021.

Mark Malone, partner at Begbies Traynor in the Midlands, said: “This huge increase in financially distressed companies in Shropshire shows that the last 12 months have undoubtedly been some of the hardest that many businesses have encountered.

"We must remember that this is no ordinary recession and while some businesses have had significant assistance from central government, large parts of the economy have had to function with their doors closed to their main source of custom.

“With the reopening of the economy over the next few months, there is a lot of work for many businesses to do, but those that have the talent to thrive in normal circumstances will find a way to adapt. The pandemic has changed customer expectations and behaviours potentially permanently, and those businesses that were profitable pre-Covid-19, and can demonstrate a strong recovery plan, can survive.”