According to the latest quarterly SME Examinership Index from leading accountancy and insolvency consultancy firm, Hughes Blake, 832 jobs in SMEs were saved through examinership this year.
An additional 1,410 jobs were saved by the process in large companies, with another 449 counted as of year end.
“All told, it is expected that examinership will have been responsible for sustaining 2,691 Irish jobs in 2013,” Hughes Blake said.
Sixteen of the 19 businesses that successfully concluded examinership in 2013 were SMEs.
The figures come as the Government finalises legislation aimed at reducing the costs of examinership applications, with SMEs being allowed to apply via the Circuit Court rather than the High Court. The move should see average examinership costs fall by 30% and will enable struggling firms with less than 50 employees — or a turnover of under €8.8m — to enter examinership, if needed.
“The falling cost of examinership, with €7,000 now the typical cost to enter examinership for a small company, means that a wide selection of small and medium firms were able to move through the process and return to profitability, saving 832 jobs this year,” said Neil Hughes, managing partner at Hughes Blake.
“Business owners who were prevented from availing of the recovery mechanism by the inconvenience of travelling to make applications to the High Court will now see their needs met much closer to home. That will open up the process to a large number of troubled SMEs based outside the capital. The index shows us that 43% of firms entering the process in the fourth quarter were based in Dublin, so a greater geographic spread would be a good thing,” he added.
Unsurprisingly, retailers have featured prominently in the list of examinerships this year — with the likes of Homebase, B&Q, Pamela Scott, The Sweet Factory and Accessorize surviving through the process.
“Only very recently has the low consumer confidence, visibly evident in every Irish town, started to abate. Many retailers were forced into arrears on their borrowings due to severely limited revenues or have struggled with upwards-only rents over the last five years. This challenging retail environment is reflected in the results of the index; examinership is the only way in Irish law that a retailer can exit from an onerous lease,” Mr Hughes added.
The index also shows the rising trend in publishing companies using the process — with The Sunday Business Post and Gazette Group both successfully exiting protection, saving over 90 jobs between them.