25th Apr 2025 09:06
(Alliance News) - Begbies Traynor Group PLC on Friday said its quarterly survey of UK companies found fewer in 'critical' financial distress than at the end of 2024 but still up on a year before.
The Red Flag Alert, compiled by the Manchester, England-based insolvency advisor, found 45,416 UK businesses in 'critical' financial distress, down 3.1% from 46,853 in the fourth quarter of 2024, though still up 13% from 40,174 in the first quarter of 2024.
'Critical' financial distress is the more severe category used by the report, with 'significant' distress being the other.
Companies in the bar and restaurant, travel and tourism, and general retailer sectors saw the biggest increase in 'critical' financial distress over the past year, Begbies said.
Julie Palmer, a partner at Begbies, said that while every business in the UK needs to be wary of the trade tariffs being imposed by the US, the travel and hospitality sector could stand to benefit as tourists look to holiday somewhere other than the US.
In addition to the US tariffs, higher UK taxes and a higher national minimum wage will create challenges for UK companies, said Begbies Executive Chair Ric Traynor. "Ultimately, if the current pressures on businesses do not ease over the next 12 months, Red Flag Alert's data points to a large number of these critically distressed businesses progressing towards formal insolvency," he said.
Begbies shares were up 0.6% to 97.80 pence early Friday in London.
By Tom Waite, Alliance News editor
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