Business failures up but key indicators positive
Company failures rose for the fifth year in succession in 2012, but the numbers showed some signs of a return to stability.
A total of 1,684 businesses collapsed during the year, according to figures compiled by Kavanagh Fennell’s insolvencyjournal.iewebsite.
A notable feature was the dramatic increase in corporate receiverships, with A|wear, Greenstar and Lyrath Estate among 399 recorded in 2012. That was 40 per cent up on the previous year and 77 per cent ahead of 2010.
A growing number of companies turned to examinership, with Eircom, Atlantic Homecare, Cappoquin Poultry and the Ritz-Carlton Hotel high-profile applicants among 27 such applications in 2012. There were just 16 examinerships in 2011.
Ken Fennell of Kavanagh Fennell, said recent changes in the rules, which would allow small private firms to apply directly to the Circuit Court for the appointment of an examiner, would likely mean a significant increase in such applications this year.
The number of business liquidations was down 6 per cent.
By sector, construction remained the hardest hit with 415 failures accounting for a quarter of all insolvencies. The figure is down 1.4 per cent on 2011. There were fewer failures in retail and hospitality, with some retail optimism over the crucial Christmas selling season. Manufacturing had the biggest rise in failures, up 26 per cent to 130.
Mr Fennell forecast a small reduction in failures this year, due in part to the reform of company law as published in the latest companies Bill, designed to reduce administrative burdens on businesses.