Four companies go bust every day

THE number of insolvencies fell slightly last month following a rise in September but the overall figure for 2010 is set to be higher than last year.

Four companies a day went out of business from January to October but the construction sector is continuing to show a marked fall in insolvencies.

Figures released by InsolvencyJournal.ie show 1,250 companies have gone bust from the beginning of 2010 to the end of October, a rise of over 10.5% on the same 10-month period last year.

The numbers fell from 120 in September to 118 in October. The October figure is a decrease of eight on last year’s figure of 126 for the same month.

Partner with Kavanagh Fennell, Ken Fennell said the company is definitely seeing a stabilisation in corporate insolvencies, from a high of 151 in February to the October figure of 118.

“While it is too early to say that the down trend will continue it is a positive that we are not seeing month- on-month increases,” he said. He said there were some signs of a stabilisation in Leinster, where numbers were steadier, 75 insolvencies in October, a rise on 73 last month and 71 in August, 46 of these were in Dublin. Ulster improved from the September figure of nine to two in October.

In Munster the number was 25, down from the September figure of 26, of these Cork had the largest number at 10. There were 15 insolvencies in October in Connaught, a rise of three on the September.

In the construction industry 26 companies went bust last month, a decrease from the September figure of 42.

In total, 377 construction companies have gone out of business so far this year.

“It is not surprising that the construction sector continues to account for the largest number of insolvencies. However, this sector continues to show a decreasing number of companies going out of business,” said Mr Fennell.

There were 16 insolvencies in the retail industry, the same figure as September, bringing the total to 156. The October figure was 21 in the hospitality industry, up from 15 in September.

The reduction in the number of examinerships continued in October, when one examiner was appointed, to Mediterranean Food & Wine Limited.

This is down on the figure of three for October last year and significantly down on the figure of 11 for October, 2008. So far this year 12 examiners have been appointed, down from 34 and 33 for the same periods last year and 2008.

“The reduction in companies availing of the examinership process would suggest companies in difficulty do not view this process as a viable option on dealing with its financial problems. Recent High Court cases may also be affecting the willingness of companies to pursue this option” Mr Fennell said.

“Although the receivership figures year-on-year are slightly higher and the continued monthly fall in the number of receiverships is encouraging, it will beinteresting to see if the slow -down trend continues. The transfer of debts to NAMA may also be a contributing factor in the deceasing number of receiverships” Mr Fennell added.