UNCERTAINTY caused by the Brexit vote could pose big challenges for companies in Scotland following a sharp rise in insolvencies in the latest quarter, experts have warned.
R3, the insolvency and restructuring trade body, said last month's vote foe the UK to leave the European Union could prompt businesses to put spending on hold causing problems across the supply chain which may prove terminal for some firms. The fall in the value of pound following the vote will increase the cost of imports.
“In the last quarter, there may have been some insolvencies caused by pre-referendum uncertainty,” said Eileen Blackburn, chair of the Scottish Technical Committee of R3. “Many companies put big decisions and new investment on hold. A delay in orders or expected financing can severely disrupt cash-flow and may have pushed some companies over the edge.”
Ms Blackburn added: “At this stage, it’s impossible to predict the long-term impact of ‘Brexit’. The UK’s relationship with the EU isn’t going to change overnight, but a weakened pound and uncertainty over what happens next could cause some companies difficulties in the coming months.”
Ms Blackburn noted firms are still grappling with the impact of the downturn in the oil and gas industry triggered by the fall in the crude price since 2014.
Official figures showed corporate insolvencies have been trending upwards over the last 12 months, following big falls since the financial crisis of 2008.
The Accountant in Bankruptcy reported that 175 firms entered compulsory liquidation in Scotland in the three months to June.This was up 14 per cent from 153 in the same period last year.
Two firms entered receivership compared with one in the same period last year.
Some 81 entered voluntary liquidations, down from 83.
The figures do not include companies going into administration, which may precede a move into liquidation.
Earlier this month KPMG said the number of administration appointments, which tend to relate to larger businesses, dipped to 24 in the quarter to June from 27 in the same period of 2015.
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