Bars and restaurants 'are most distressed'

By Mark Wingett, M&C Report

- Last updated on GMT

Related tags: Debt, Money, Corporate finance, Begbies traynor

Closed: pubs are struggling
Closed: pubs are struggling
Bars and restaurants are showing the biggest signs of financial distress amongst UK businesses, according to the latest Red Flag Alert released by...

Bars and restaurants are showing the biggest signs of financial distress amongst UK businesses, according to the latest Red Flag Alert released by administrators Begbies Traynor.

The report, which monitors a series of indicators of company cash problems, found bar and restaurant businesses facing difficult monetary issues had risen by 68% during the first quarter of 2011 against the same period a year ago.

In total, the report, found that 186,554 firms in the UK experienced "significant" or "critical" financial distress in the first quarter of 2011, compared to 161,601 a year earlier. That is a 15% rise on the same period last year and a 26% rise on the previous quarter.

It said that the increase was in part due to members of the public cutting discretionary spending and a drop in consumer confidence in the face of anticipated job loses in the the public sector.

Ric Traynor, chairman of Begbies Traynor said: "High levels of legal actions taken against debtors indicate that creditors are attempting to maximise cash collection right across their customer base. The hike in oil prices and January's VAT increase has made cash flow and credit control essential priorities for most businesses with some seeking payments through the courts."

Related topics: News

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