Company failures on the rise

An average of 10 companies per day were declared insolvent in April, new data has shown.

According to Vision-net.ie, the numbers of businesses closing down also increased, as did the number of companies that had a receiver appointed.

Some 148 companies began to wind up, with the retail, hospitability and professional services sectors affected particularly badly. The majority of these businesses are likely to be deemed insolvent, Vision-net said, and creditors’ meetings have been instigated.

A total of 62 firms had receivers appointed during the month, double that of the same month in 2010.

“The spikes in closures and receiverships are notable. For these figures to be nearly double the averages for the year to date is striking,” said Vision-net managing director Christine Cullen. “Regrettably, the bad debt tale continues with the damage of extending blind credit all too apparent. In real terms, right now we are seeing one in every two companies are in trouble and at risk of not being able to meet their daily financial and trade commitments.”

The pursuit of debts through the courts also continued, with almost 500 judgments totalling €25 million awarded during the month, the majority of which were against consumers.

The number of new businesses started in April dropped by 26 per cent, with 2,892 start-ups established during the month.

Vision-net provides information on companies in Ireland and the UK.