More than 3,000 Shropshire companies in significant financial distress

These figures represented a three per cent decrease in the number of businesses struggling between the first and second quarters of 2022 and also a 14 per cent year-on-year fall on the same period in 2021.

However, when looking at the sector picture, there is evidence that some of the region’s industries are continuing to struggle, with leisure and cultural and health and education experiencing the biggest quarterly increases, seeing 10 and five per cent rises respectively between the first two quarters of 2022.

The latest figures have been revealed in Begbies Traynor’s Red Flag Alert, which monitors the financial health of British companies.

Nationally, the latest Red Flag Alert research for the second quarter of 2022 recorded 582,452 businesses in significant distress with companies continuing to be impacted by rising inflation, higher labour, material and energy prices, and faltering consumer and business confidence.

Evidence of this financial distress comes in the form of County Court Judgement (CCJ) data, arguably an early warning sign of future insolvency, which revealed 46,235 rulings in the first six months of 2022, up five per cent on the first quarter, as creditors tried to recover debts. This compares with 59,042 CCJs during the entirety of 2021, with this year’s figure to date driven higher as the backlog in the courts clears and debts are pursued.

Mark Malone, partner at Begbies Traynor in the Midlands, said: “Having emerged from the pandemic, companies in Shropshire were hoping for an economic boom but that has simply fizzled out, as a combination of economic issues have taken their toll, reducing both business and consumer confidence.

“Indeed, rising insolvency rates, combined with our own anecdotal evidence from speaking to the directors of distressed companies, highlight the impact of rising costs on businesses.

“Many are fighting on, but the environment is only going to get worse, not better, at least until next year. I fear that it will be a troublesome autumn as businesses which have struggled for so long are finally overwhelmed.

“That is why it is so important that any businesses facing financial difficulties, for whatever reason, should seek professional advice in order to fully understand the options available.”