Sunday, November 8, 2009 Previous editions
Friday, July 03, 2009
THE number of firms that will collapse this year will hit levels never before seen in the State.
Liquidations for the first six months of this year are already 318% up on 2007 figures, according to InsolvencyJournal.ie, which notes there are now 27 insolvencies a week in Ireland.
In the first half of this year there were 702 insolvencies, a 129% increase on the same period last year. And the number has already exceeded the record number of 618 recorded in 1994.
If the figures continue on the same trend for the next six months, the number of insolvent liquidations for 2009 will be more than double the figure for 1994.
Although construction firms have been hardest hit there has been a drop in the number of firms in this sector going into liquidation, from 42 in April 2009 to 34 in May and 26 in June.
"The construction sector appears to be bottoming out and now the financial crisis has started to hit the general main stream," said Edel Ryan, editor of InsolvencyJournal.
There was an increase of 82% in insolvencies in the services sector in the second quarter of the year, up from 40 in the first quarter to 73.
The knock-on effect has resulted in a higher number of redundancies from SME companies in the general SME sector as they struggle to keep afloat, the journal said.
Wholesale retail showed a 325% increase in insolvent liquidations from quarter one to quarter two of 2009.
"The significant increase in insolvencies in these sectors confirms the downturn is spreading to other areas and the crash in the property market is causing a ripple effect," said Ms Ryan.
InsolvencyJournal said one notable point is the significant decrease in receiverships in quarter two, 25, compared to quarter one, 48. It said comparing the two periods, receiverships are down 47% in the last three months and this decrease may be related to a strategic manoeuvre by the banks before the introduction of NAMA.
Construction firms accounted for 211 or 30% of total insolvencies in the first half of the year while the hospitality sector accounted for 14%, as did the retail sector. The services industry made up 16%.
Meanwhile, the executive chairman of the Buy & Sell classified advertising group remains optimistic about the company’s future after it entered examinership, according to InsolvencyJournal.
Buy & Sell director Noel Boyle said the business is fundamentally profitable despite the negative climate for advertising sales. However, the firm said a debt of over €18 million with National Irish Bank had become unsustainable.
Buy & Sell’s print newspaper lost more than half its circulation in 2008. However, the substantial growth of its online business makes Boyle confident about the future.
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