Examinership process saves 1,700 jobs

More than 1,700 jobs have been saved through the use of the examinership process for troubled companies in the first nine months of the year — the majority in small-and medium-sized businesses.

The latest Hughes Blake SME Examinership Index shows that of those 1,700 jobs more than 60% have been rescued in SMEs.

In the third quarter of the year, 540 positions were saved with 10 firms coming through examinerships in both the Circuit Court and High Court, both recorded for the first time.

Celbridge Playzone, Co Kildare, became the first company to successfully complete a Circuit Court examinership in July with Hughes Blake anticipating more firms will avail of the process now that the Circuit Court avenue is available.

Hughes Blake Chartered Accountants managing partner, Neil Hughes said the examinership route is becoming increasingly popular among companies looking to show their potential for survival.

“Despite the fact the economy is clearly recovering, the index demonstrates that there continues to be a significant number of small-and medium-sized businesses throughout the country who still need to restructure to address legacy debt issues.

“For many, the challenges of the past few years are not over and the reality is that they aren’t yet on a viable footing for a sustainable future.

“Addressing issues through an examinership is emerging as a preferred route for those companies as they are in a position to prove that they have a real prospect of survival in the future,” said Mr Hughes.

The increasing number of firms opting for examinership — a rescue process whereby an accountant is appointed by the court to a company to facilitate its restructuring — is borne out by the 52% increase in SME jobs saved to date this year compared to the same period in 2013.

One of the non-SME firms to emerge from examinership this year was sports retail outlet Elverys which employs more than 650 across 55 stores.

The rural hospitality sector continues to be among the hardest hit in the country, according to Mr Hughes, who said the prevalence of these businesses in the figures demonstrates their dependance on the mechanism.

“Hotels and bars outside the capital were very badly hit during the recession and we are still seeing the impact of this sustained period of hardship in the nature of the enterprises that are seeking the examinership process.”

Mr Hughes said that for the first time since the downturn there is clear and tangible evidence of a turnaround, with the vast majority of businesses the accountancy firm acts on behalf of believing the recession is “well and truly over”.