Hotels and restaurants in East of England 'at heightened risk of insolvency'
PUBLISHED: 11:30 09 December 2019
The East of England's agricultural sector is healthier than most other parts of the UK - but construction, hotel and restaurant businesses are at heightened risk, a report suggests.
A study by insolvency and restructuring specialists R3 Eastern shows that farming is outperforming its regional counterparts with one of the lowest levels of elevated insolvency risk in the UK.
But other business sectors in the region are struggling, figures compiled by R3 for November suggests.
MORE - Farming has 'great future' - but it must change, says new farm co-op chair
The trade body, which used Bureau Van Dijk's Fame database, found around one in three agricultural businesses - or 32.9% - are at higher than normal risk of insolvency - one of the lowest statistics for the sector in the UK. Only London and the north east have lower percentages.
Wales has the highest percentage at 45.3% - more than nine points above the UK average of 36.2%.
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Other sectors in the East of England are faring less well, figures suggest.
Construction has the third highest proportion of businesses at above average risk across the UK regions with almost half - 45.6% - about 2% above the UK average of 43.7%. Only the south east and south west have a higher percentage of construction businesses at elevated risk of insolvency, with levels of 47.2% and 47.8% respectively.
The research also showed 37.4% of hotel companies in the region judged to be at elevated insolvency risk in November - more than 5% above the UK-wide figure of 32%. The picture is similar for the region's restaurant operators, with 35.2% at heightened risk of insolvency compared to the UK average of 32.9%, a gap of more than 2%.
R3 Eastern chair Mark Upton, a partner at Ensors Chartered Accountants in East Anglia, said: "It is encouraging to see local agricultural businesses outperforming their national competition but the regional picture overall is no cause for celebration. We have to be realistic that the East of England, and the UK as a whole, continues to face some strong economic challenges.
"Uncertainty and stop-start stockpiling are among the factors hitting local investment and wider business health, and members of the insolvency and restructuring profession report anecdotally that they are seeing increasing numbers of companies worrying about their cashflow levels and order books."